M/S Benaka Medicals vs. The Assistant Commissioner Of Commercial Taxes

Held

The Court allowed the petition in part and quashed the orders dated December 22, 2023 (under Section 73), December 28, 2023 (summary order), and August 7, 2026 (under Section 107(11)). The Court found the petitioner's explanation regarding the non-receipt of notices to be plausible, especially considering that the intimation of notices was not uploaded on the portal and the petitioner's assertion of an inaccessible email. The Court acknowledged that the proceedings were initiated due to a mismatch between Form GSTR-2A and GSTR-3B and that the petitioner claimed a proper reconciliation would occur if their response was considered. Therefore, the Court was of the view that the petitioner deserved another opportunity to respond to the Show Cause Notice. The petitioner was directed to file their response, if any, to the Show Cause Notice dated September 25, 2023, by November 16, 2026, without further notice.

Facts

The petitioner, M/s Benaka Medics, filed a writ petition challenging orders passed by the Assistant Commissioner of Commercial Taxes and the Joint Commissioner of Commercial Taxes (Appeals). The impugned orders, dated December 22, 2023, December 28, 2023, and August 7, 2026, pertain to the tax period July 2017 to March 2018. The petitioner's primary grievance is that they were not properly served with notices, including the Show Cause Notice in Form GST DRC-01 dated September 25, 2023. They claim their email was inaccessible, and notices were not uploaded on the GST portal. The petitioner stated they only became aware of the proceedings via WhatsApp and responded through their Chartered Accountant on December 26, 2023, after the impugned order had already been passed. A recovery notice dated July 7, 2026, with a lien of Rs. 14,08,645/- on the petitioner's bank account, is also challenged.

Key Issues

1. Whether the petitioner was duly served with the Show Cause Notice dated September 25, 2023, and other relevant notices for the tax period July 2017 to March 2018, under the relevant provisions of the CGST/KGST Act and Rules? Petitioner's arguments: The petitioner contended that they were not served with any notices due to an inaccessible email and the non-uploading of notices on the GST portal. They claimed to have learned about the proceedings via WhatsApp and responded promptly through their Chartered Accountant. They argued that the impugned orders were passed without affording them a proper opportunity to be heard. Revenue's arguments: The High Court Government Pleader accepted notice and was heard in light of the circumstances presented by the petitioner. The judgment does not explicitly record separate arguments from the revenue regarding the service of notice or the merits of the case, but rather focuses on assessing whether the petitioner deserved another opportunity.