Ayush Agarwal Proprietor Of M/S Shakambari Agro Foods vs. The State Of Madhya Pradesh

Held

The Court held that the petitioner had made out a case that they missed the receipt of the notice and could not respond to the show cause notice because it was uploaded under the "Additional Notices" tab. This led to the impugned order being passed without the petitioner's response, thus violating the principles of natural justice. The Court relied on pronouncements from the Madras High Court and the Delhi High Court, which had addressed similar issues concerning the placement of notices on the GST portal and the consequent insufficiency of service. The Court found that the complex architecture of the web portal had resulted in the petitioner failing to notice the issued notice. Consequently, the impugned order dated 20.03.2024 was set aside, and the matters were remanded back to the Proper Officer for fresh adjudication. The Court clarified that it had not commented on the merits of the contentions of either party. The operative direction was to open the portal for the petitioner to file a response to the show cause notices within two weeks, after which the Proper Officer would re-adjudicate after providing an opportunity of personal hearing and passing fresh speaking orders.

Facts

The petitioner, Ayush Agarwal, proprietor of M/s Shakambhari Agro Foods, filed multiple writ petitions challenging orders passed under Section 73 of the Central Goods and Services Tax Act, 2017. The petitioner contended that they were unaware of the show cause notices as they were uploaded on the GST portal under the "Additional Notices and Orders" category, rather than the primary "View Notices and Orders" tab. This led to the petitioner being unable to respond to the notices, resulting in ex-parte orders and demand creation. The petitioner argued that this was a procedural lapse due to the portal's complex architecture, violating principles of natural justice. The impugned orders were passed by the Proper Officer.

Key Issues

1. Whether the placement of show cause notices under the "Additional Notices and Orders" tab on the GST portal, instead of the "View Notices and Orders" tab, constitutes valid service of notice and adherence to principles of natural justice, as per Section 73 of the Central Goods and Services Tax Act, 2017? The petitioner argued that the notices were not properly served because they were uploaded under a secondary category on the GST portal, leading to their unawareness and inability to respond. They relied on judgments from the Madras High Court (W.P. No.26457/2023 and W.P. No.22369/2023) and the Delhi High Court (Writ Petition No.2746/2024) which highlighted similar issues with portal communication and the violation of natural justice. The petitioner contended that if the notices had been placed in the primary section, they would have been aware and participated in the proceedings. The respondents (State of Madhya Pradesh and others) did not record any specific arguments against the petitioner's contentions in the provided judgment excerpt. However, the impugned order itself noted that the taxpayer neither deposited the tax amount nor filed any response to the notice.