M/S Bright International vs. State Of Punjab And Others

Facts

The petitioner, M/s Bright International, challenged the validity of service of a Show Cause Notice (SCN) and an order-in-original, which were allegedly served by uploading them on the common portal (www.gst.gov.in). The petitioner contended that this method of service did not constitute proper service under Section 169 of the Central Goods and Services Tax Act, 2017, especially as they claimed to be illiterate and unaware of the uploads. The revenue argued that uploading on the common portal, particularly after the introduction of Section 115 of the Finance Act, 2022, and amendments to the notification under Section 146 of the CGST Act, 2017, constituted valid service, especially if the assessee had knowledge and contested the proceedings. The case was considered in light of previous judgments by the same High Court in Luxmi Traders v. Union Territory of Chandigarh and The Amar Cooperative LC Society Ltd. v. State of Haryana and Others.

Held

The Court held that uploading of a Show Cause Notice (SCN) or an order-in-original on the common portal alone does not constitute sufficient service unless its receipt is acknowledged or a reply is filed. The Court found substance in the petitioner's submissions that the Rules of 2017 do not explicitly permit the common portal for service of SCNs/orders and that the complex process of service via upload, especially when it leads to serious civil consequences for the assessee, cannot be approved by law. The Court was not persuaded to take a different view from its previous judgments in Luxmi Traders and The Amar Cooperative LC Society Ltd., despite the revenue's reliance on Section 115 of the Finance Act, 2022. The Court reiterated that in cases where the SCN was served only by uploading and an ex parte order was passed without a reply, the proceedings would be restored to the stage of SCN issuance, allowing the petitioner to file a reply within four weeks. If an order-in-original was passed after contest and served only by upload, the limitation period for appeal would not be triggered, and the assessee would have four weeks to file an appeal. If appeals were dismissed on limitation grounds, they would be restored. In the present case, the order was uploaded only on the common portal, and the petitioner claimed illiteracy and lack of knowledge. Therefore, the writ petition was disposed of in terms of the Luxmi Traders judgment, with directions for the appeal to be heard on merits if 10% pre-deposit was made, and any recovery to abide by the final adjudication.

Key Issues

1. Whether uploading of a Show Cause Notice (SCN) and an order-in-original on the common portal (www.gst.gov.in) amounts to proper service under Section 169 of the Central Goods and Services Tax Act, 2017, particularly when the assessee claims illiteracy and lack of knowledge? Petitioner's Arguments: The petitioner argued that mere uploading on the common portal is not sufficient for valid service, especially for an illiterate person who had no knowledge of the upload. They contended that the Rules of 2017 do not explicitly permit the uploading of SCNs/orders on the common portal for service, and Rule 142 of the Rules of 2017, which deals with electronic communication, does not cover such uploads. They relied on the court's previous observations in Luxmi Traders that complex service methods leading to serious civil consequences are not approved by law. Revenue's Arguments: The revenue contended that uploading on the common portal constitutes valid service, especially after the introduction of Section 115 of the Finance Act, 2022, which retrospectively amended the notification under Section 146 of the CGST Act, 2017. This amendment, they argued, allowed all functions under the CGST Rules, 2017, to be performed on the common portal, including service of notices and orders. They also argued that if the assessee had knowledge and contested the proceedings, the SCN could not be deemed not served.