H S Wires INDIA Private Limited vs. Union Of INDIA And Others

Facts

The petitioner, M/s H.S. Wire (India) Pvt. Ltd., filed a writ petition challenging the validity of service of an order-in-original solely through uploading on the common GST portal. 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. The revenue argued that amendments, specifically Section 115 introduced by the Finance Act, 2022, and retrospective amendments to a notification dated January 23, 2018, expanded the functions performable on the common portal to include all functions under the CGST Rules, 2017. The case was considered in light of previous judgments of 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 service of a Show Cause Notice (SCN) upon an assessee cannot be deemed sufficient merely by uploading it on the Common Portal, unless its receipt is acknowledged or a reply is filed. In cases where an SCN is served only by uploading on the Common Portal and an ex parte order-in-original is passed without a reply, the proceedings are to be restored to the stage of SCN issuance. The petitioner would then be at liberty to file a reply within four weeks, after which the department must proceed after affording a hearing. The Court reiterated its findings from Luxmi Traders (supra) and The Amar Cooperative LC Society Ltd. (supra), finding substance in the petitioner's submissions. The Court was not persuaded to take a different view based on the reference to the Finance Act, 2022, as the Rules of 2017 explicitly confine the utility of the Common Portal to limited functions and do not substitute formal service of SCNs/orders. The Court noted that the petitioner claimed illiteracy and lack of knowledge of the uploaded order. The writ petition was disposed of in terms of the previous judgments. If the petitioner had deposited 10% of the amount as statutory pre-deposit, the appeal would be heard on merits. Any recovery would abide by the final adjudication, and any bank account attachment would be revoked.

Key Issues

1. Whether uploading of a notice and/or order on the common portal (www.gst.gov.in) amounts to proper service in view of Section 169 read with Section 146 of the Central Goods and Services Tax Act, 2017? Petitioner's arguments: The petitioner argued that the Rules of 2017 do not permit the uploading of Show Cause Notices (SCNs) or orders on the common portal for service. They contended that Rule 142 of the Rules of 2017 is the only relevant provision for electronic communication, and previous judgments (Luxmi Traders) held that orders uploaded without containing the SCN/order itself, or without acknowledgment of receipt or a reply, do not constitute valid service. They further argued that the 'Common Portal' is used for specific purposes like registration and returns, not for substituting formal service of SCNs/orders, and that the amendment by the Finance Act, 2022, does not legitimize service of SCNs/orders via mere uploading. Revenue's arguments: The revenue contended that the amendment by the Finance Act, 2022, specifically Section 115, retrospectively amended the notification dated January 23, 2018, to include all functions under the CGST Rules, 2017, to be performable on the common portal. They argued that this amendment validates the service of SCNs/orders through uploading on the common portal, especially if the assessee had knowledge and contested the proceedings.