Winstrol Petrochemicals PVT. LTD vs. Commissioner, SGST

Held

The Court held that the Department failed to effect valid service of the notices on the petitioner. The service of notices exclusively through the GST portal, when the petitioner's registration had been cancelled and they were not enjoined to monitor the portal, did not satisfy the statutory requirement of service under Section 169 of the CGST Act. The Court reasoned that insisting on portal-based service alone imposed a duty on a non-registered person, which the law does not contemplate. Furthermore, the Court found that the impugned order violated Section 75(4) of the CGST Act, which mandates an opportunity of hearing, embodying the principle of audi alteram partem. The Court relied on its previous judgment in M/s Nulife Medical Store and decisions of the Allahabad High Court and the Apex Court. Consequently, the impugned order dated 29.12.2023 was quashed. The Revenue was granted liberty to issue a fresh notice and adjudicate the matter in accordance with law, ensuring the petitioner is granted an opportunity of personal hearing if desired.

Facts

The petitioner, Winstrol Petrochemicals Pvt. Ltd., filed a writ petition challenging an order dated 29.12.2023 passed under Section 73(9) of the Goods and Services Tax Act, 2017, for the financial year 2017-18. This order imposed a tax liability of ₹61,09,556.00, interest of ₹67,84,620.08, and penalty of ₹6,29,623.60. The petitioner's GST registration had been cancelled effective 01.01.2019. The petitioner contended that the show-cause notice and subsequent order were not validly served as they were only uploaded on the GST portal after the cancellation of their registration, and they were not expected to monitor the portal. The petitioner sought quashing of the impugned order and show cause notice, a direction for re-decision with a personal hearing, and de-freezing of their bank accounts.

Key Issues

1. Whether the service of notices exclusively through the GST portal, in circumstances where the petitioner's registration stood cancelled, constitutes valid service under Section 169 of the CGST Act? 2. Whether the impugned order suffers from a violation of the statutory mandate under Section 75(4) of the CGST Act, requiring an opportunity of personal hearing? The petitioner argued that after the cancellation of their GST registration, notices should have been served through alternative modes and not solely by uploading them on the portal, as they were not obligated to monitor the portal. They relied on the judgment in M/s Nulife Medical Store vs. Commissioner, State Goods and Service Tax, which held that after registration cancellation, service must be effected through alternative modes. The petitioner also contended that the principles of natural justice were violated due to the lack of a proper personal hearing. The revenue, through its learned Standing Counsel, did not dispute that the show-cause notice was presumably served by uploading it on the GST portal and not by any other mode.