M/S Lakshya Bricks vs. State Of Rajasthan

Held

The Court acknowledged the petitioners' argument that service was not provided under Section 169 of the CGST Act, as notices were allegedly only placed on the portal without prior communication via registered email or post. The Court noted that this led to ex-parte orders and seizure of bank accounts, causing business disruption. Considering that the petitioners had already deposited Rs. 1,29,584/-, which was more than 10% of the disputed amount, the Court stayed further recovery. The Court directed the respondents to release the petitioners' bank accounts to allow them to continue business. The deposited amount of Rs. 1,29,584/- was deemed sufficient for entertaining an appeal under Section 107 of the CGST Act. The petitioners were granted liberty to challenge the recovery orders before the Appellate Authority, which was directed to pass a speaking order on merits after providing a hearing within three months.

Facts

M/s Lakshya Bricks and its partner, Anil Agarwal, filed a writ petition before the Rajasthan High Court. The petitioners challenged the ex-parte orders passed against them, which led to the seizure of their bank accounts, halting their business operations. The primary grievance was that the notices were allegedly not served properly, having been merely placed on the portal without being sent via registered email or post as contended by the petitioners. The petitioners stated they had already paid the principal amount of Rs. 1,29,584/-, with the total amount including interest reaching Rs. 3,53,778/-. The State of Rajasthan and the Union of India were the respondents.

Key Issues

1. Whether service of notices solely by uploading on the GST portal, without prior communication through registered email or post, constitutes valid service under Section 169 of the CGST Act, 2017? The petitioners argued that such portal-only service is insufficient, preventing them from knowing about and contesting the notices. This lack of proper notice led to ex-parte orders and subsequent seizure of bank accounts, crippling their business. They contended that service must be effected first through registered email or post. The respondents, represented by the State and Union of India, accepted notice. The judgment does not explicitly record their arguments on the validity of service or other aspects of the case. However, their acceptance of notice implies they would contest the petitioners' claims.