Khyati Construction Company Through Its Authorized Signatory Abhishek Awashti vs. The State Of Madhya Pradesh

Held

The Court held that the impugned orders dated 19.09.2022 were not sustainable. Following the law laid down by the Delhi High Court in Anhad Impex and a coordinate bench of this Court in Agrawal Wheels Pvt. Ltd., the Court found that the manner of service of the notice was inadequate. The principle derived is that a show cause notice must be effectively communicated to the assessee to ensure compliance with principles of natural justice. Placing a notice in a less conspicuous section of the portal, without ensuring actual knowledge, renders the subsequent order unsustainable. The Court quashed the impugned orders and remitted the matter to the authority concerned for passing a fresh order after affording the petitioner an opportunity of a personal hearing.

Facts

The petitioner, Khyati Construction Company, filed a writ petition challenging a show cause notice and a final order passed under Section 73 of the GST Act. The petitioner contended that they did not receive the notice as it was only available under the 'View Additional Notice and Orders' section on the portal. The State of Madhya Pradesh was the respondent. The impugned order was passed on 19.09.2022. The procedural history involves the issuance of the notice and order, which the petitioner is now challenging.

Key Issues

1. Whether the impugned order passed under Section 73 of the GST Act is sustainable when the petitioner was not properly served with the show cause notice, having only been notified through the 'View Additional Notice and Orders' section on the GST portal? (Question of law and fact, turning on principles of natural justice and procedural fairness under the GST Act). Petitioner's contention: The petitioner argued that the notice did not come to their knowledge because it was placed in a section of the portal that was not actively monitored or considered as direct service. They relied on the principles of natural justice, emphasizing that proper communication of a show cause notice is essential for a fair hearing. Revenue's contention: The judgment does not record any specific arguments made by the revenue or State. However, the State was represented by a Government Advocate.