M/S. Uzhavan Enterprises vs. The Deputy State Tax Officer-2

Held

The Court held that while uploading notices on the GST portal can be considered sufficient service, the respondent, upon receiving no response to repeated reminders, should have explored other modes of service prescribed under Section 169 of the GST Act, such as Registered Post with Acknowledgement Due (RPAD), to ensure effective communication. The Court found a lack of effective opportunity for the petitioner to serve notices and orders. Consequently, the impugned order dated 08.06.2024 was set aside. The matter was remanded to the respondent for fresh consideration, conditional upon the petitioner paying 25% of the disputed tax amount within four weeks. The petitioner was also directed to file their reply within three weeks of making the payment, after which the respondent was to issue a 14-day clear notice for a personal hearing and pass a fresh order on merits. The Court noted that the setting aside of the order would take effect from the date of payment of the 25% amount.

Facts

The petitioner, M/s. Uzhavan Enterprises, filed a writ petition before the Madurai Bench of the Madras High Court challenging an order dated 08.06.2024 and a summary of order in FORM GST DRC 07, both passed by the Deputy State Tax Officer-2. These orders were passed for the financial year 2020-21 under Section 73 of the GST Act. The petitioner contended that while notices, including the show cause notice and three reminders, were uploaded on the GST common portal, their accountant was unaware of these communications, leading to a failure to file a reply within the stipulated time. Consequently, the impugned order was passed without providing an opportunity for a personal hearing. The petitioner expressed willingness to pay 25% of the disputed tax amount.

Key Issues

1. Whether the impugned order passed under Section 73 of the GST Act is liable to be quashed for want of proper opportunity of personal hearing to the petitioner? Petitioner's argument: The petitioner argued that despite notices being uploaded on the GST portal, their accountant's lack of awareness prevented them from filing a reply. They contended that the order was passed ex parte without a personal hearing, violating principles of natural justice. They relied on the principle that mere uploading of notices on a portal may not constitute effective service if the taxpayer remains unaware. Respondent's argument: The respondent admitted that notices were uploaded on the GST portal but acknowledged that no personal hearing was provided to the petitioner before passing the impugned order. The respondent agreed to remit the matter back to the authority, subject to the petitioner paying 25% of the disputed tax amount.