M/S Lakshya Bricks vs. State Of Rajasthan

Held

The Court held that placing notices only on the portal without prior communication through registered email or registered post might not constitute sufficient service under Section 169 of the CGST Act. The Court noted that the petitioners had paid an amount exceeding 10% of the disputed sum, specifically Rs. 1,29,584/-. Consequently, the Court stayed further recovery proceedings and directed the respondents to release the petitioners' bank accounts to enable them to continue their business. The deposited amount of Rs. 1,29,584/- was deemed sufficient for entertaining the 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 an opportunity of hearing within three months. The issue of whether the portal-based service was fundamentally invalid was not definitively decided, but the immediate relief was granted based on the substantial deposit and the potential for lack of proper notice.

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 petitioners argued that proper service of notices was not effected under Section 169 of the CGST Act, as notices were merely placed on the portal without being sent via registered email or post. The petitioners stated they had already paid the principal amount of Rs. 1,29,584/-, with the total amount including interest being Rs. 3,53,778/-. The respondents, including the State of Rajasthan and the Union of India, accepted notice.

Key Issues

1. Whether the placement of notices solely on the GST portal constitutes valid service under Section 169 of the CGST Act, 2017, when registered email or registered post was not utilized as a primary mode of communication? (Question of law) Petitioner's contention: The petitioners argued that service is not complete under Section 169 of the CGST Act merely by uploading notices on the portal. They contended that notices must first be sent to the taxpayer's registered email or by registered post. Failure to do so meant they were unaware of the proceedings, leading to ex-parte orders and subsequent seizure of bank accounts. They relied on the principle that proper service is a prerequisite for valid proceedings. Revenue's contention: The judgment does not record any specific arguments made by the revenue or state respondents regarding the validity of service or the procedural aspects.