When a taxpayer’s GST registration is canceled, it might seem like the end of their obligations under the Goods and Services Tax (GST) regime. However, there’s a curious twist to this scenario. Taxpayers are still required to keep a vigilant eye on the GST Portal even after their registration has been canceled. This peculiar situation arises due to the provisions of Section 169 of the Central Goods and Services Tax (CGST) Act, which outlines how various communications, including notices and orders, can be served. In this article, we’ll delve into the intricacies of Section 169 and explore a recent case before the Hon’ble Kerala High Court that highlights the importance of remaining vigilant post-GST registration cancellation.

Section 169: Serving Notices and Orders

Section 169 of CGST Act, reads as under-

196. (1) Any decision, order, summons, notice or other communication under this Act or the rules made thereunder shall be served by any one of the following methods, namely:— 

(a) by giving or tendering it directly or by a messenger including a courier to the addressee or the taxable person or to his manager or authorised representative or an advocate or a tax practitioner holding authority to appear in the proceedings on behalf of the taxable person or to a person regularly employed by him in connection with the business, or to any adult member of family residing with the taxable person; or
(b) by registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorised representative, if any, at his last known place of business or residence; or
(c) by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or
(d) by making it available on the common portal; or
(e) by publication in a newspaper circulating in the locality in which the taxable person or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain; or
(f) if none of the modes aforesaid is practicable, by affixing it in some conspicuous place at his last known place of business or residence and if such mode is not practicable for any reason, then by affixing a copy thereof on the notice board of the office of the concerned officer or authority who or which passed such decision or order or issued such summons or notice.

(2) Every decision, order, summons, notice or any communication shall be deemed to have been served on the date on which it is tendered or published or a copy thereof is affixed in the manner provided in sub-section (1).

(3) When such decision, order, summons, notice or any communication is sent by registered post or speed post, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by such post in transit unless the contrary is proved.

The Role of GST Portal

As could be seen from the above provision, Notices, summons, Orders, etc can be served by the Department by any one of the methods prescribed therein. Clause (d) of Section 169(1) allows serving of the communication by means of serving on the GST Portal. The said clause, is not differentiating between a registered Tax payer and a Taxpayer whose registration has been cancelled, which leads to the question, as to, till what period, is the Taxpayer whose GST registration has been cancelled, is supposed to keep a watch on the GST Portal, looking out for such communications.

The Kerala High Court Case: A Hard Lesson

In a case before the Hon’ble Kerala HC [WP(C) NO. 21212 OF 2023- KODUVAYUR CONSTRUCTIONS-ORDER DT. 7.8.2023], the petitioner had approached the Court pointing out that his registration was cancelled on 30.9.2021 and was served with a demand notice for Rs.19,22,566/- on the GST Portal on 14.10.2022. The petitioner contended that he was under the bonafide belief that it has no liability under the CGST/SGST Acts and that it was not served with a proper notice as provided under the Act.

In the said case, it was noted by the Court that a reading of Clauses (a) to (f) of sub-sec(1) of Sec.169 clearly shows that any decision, order, summons, notice or communication under the Act and Rules can be served on the assessee through any one of the methods mentioned therein. The petitioner does not dispute the fact that the assessment order was made available on the common portal. It then went on to hold that it was the bounden duty of the petitioner to have verified its common portal that is made available as per the provision. The contentions raised in the writ petition that assessment order was not served as per the provisions of the Act is untenable. The writ petition is meritless and is consequentially dismissed.

The above decision appears to be harsh as the Demand order was communicated after more than one year of the cancellation of registration, which could very well have been served by any of the other methods prescribed in Section 169. Inspite of the registration having been cancelled, expecting such a Taxpayer, to keep a tab on the GST Portal, even after one year appears unreasonable. However, legally, the decision can be said to be in order. The Hon’ble HC, though, could have been a little more lenient using its discretionary powers, particularly, since the registration was cancelled a year back.

Conclusion: The Taxpayer’s Dilemma

While legally sound, this decision raises questions about the practicality of expecting a taxpayer, whose registration has been canceled, to actively monitor the GST Portal for over a year. The ruling serves as a reminder that, under Section 169, taxpayers can receive communications through various methods, including the GST Portal. However, it also highlights the need for clear guidelines on how long taxpayers in this peculiar situation should remain vigilant. Until such guidance is issued, remaining alert post-GST registration cancellation remains a taxing dilemma for taxpayers.

Author Bio

Qualification: BSC, LLB
Company: GST
Location: Mumbai Suburban, Maharashtra, India
Member Since: 01 Aug 2023 | Total Posts: 10
I joined Central Excise department as an Inspector in March 1987 and took voluntary retirement from service, while working as a Superintendent (GST), on 4th Jan 2022. Presently working as a freelancing Consultant, mostly related to GST issues. View Full Profile

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December 2023