Procter And Gamble Health LTD vs. Union Of INDIA

Held

The Court held that the service of notices and orders through the web portal is permissible under Section 169(1)(d) of the CGST Act. The petitioner admitted to becoming aware of the impugned orders in September 2025 when they were noticed on the GST portal. Therefore, the contention that there was no service at all was rejected. The Court also noted that the impugned orders were passed in 2024, and the writ petition was filed at a much later stage. Citing the Supreme Court judgment in M/s. Glaxo Smith Kline Consumer Healthcare Ltd., the Court stated that while writ petitions can be entertained for lack of jurisdiction or violation of natural justice, delay in approaching the court and the availability of an alternative statutory remedy are relevant considerations. In this case, the petitioner, having come to know of the orders in September 2025, ought to have taken steps to challenge them without further delay. The Court found no sufficient reason to justify the delay in approaching the court, especially when statutory remedies were available. Consequently, entertaining the writ petition at such a belated stage was not justified. The Court did not expressly decide the merits of the procedural violations alleged by the petitioner regarding Sections 42(3) and 42(5) or the service of notice at the correct address, as the petition was dismissed on grounds of delay and belated approach.

Facts

The petitioner, Procter & Gamble Health Ltd., filed a writ petition challenging an Order-in-Original No.51/2024-25-GST dated 23.08.2024, and a consequential DRC-07 dated 03.09.2024, passed by the 2nd respondent for the financial year 2019-20. The petitioner, a recipient of supplies, had paid the tax component and subsequently cancelled its GST registration in 2022, providing an alternate address for communications. The petitioner contended that the impugned order, which sought recovery of input tax credit in excess of amounts reflected in supplier returns, was passed without following the prescribed procedure under Sections 42(3) and 42(5) of the CGST Act, which mandate prior notice to both supplier and recipient. The petitioner also claimed that no show-cause notice was served at its revised address, and the physical notice was sent to an old, unused address, violating principles of natural justice. The petitioner became aware of the order in September 2025 through the GST portal.

Key Issues

1. Whether the Order-in-Original No.51/2024-25-GST dated 23.08.2024 and consequential DRC-07 dated 03.09.2024 are ultra vires the provisions of the Central Goods and Services Tax Act, 2017, particularly Sections 42(3) and 42(5), due to non-compliance with the mandatory procedure of issuing notice to both supplier and recipient before recovery from the recipient? 2. Whether the exercise of power by respondent No.2 under Section 169(2)(c) of the CGST Act, without first recovering tax from suppliers, is arbitrary and capricious? 3. Whether the impugned orders are liable to be set aside on the grounds of lack of proper service of notice, violation of principles of natural justice, and passing of orders without jurisdiction or in excess of jurisdiction? Petitioner's arguments: The impugned order violates Sections 42(3) and 42(5) of the CGST Act as no notice was issued to the supplier, and recovery from the recipient is permissible only after the supplier fails to rectify the mismatch. The order was passed without jurisdiction and in excess of powers. Reliance was placed on judgments from the Calcutta, Supreme Court, and Madras High Courts. Furthermore, no show-cause notice was served at the petitioner's revised address provided at the time of registration cancellation, and the physical notice was sent to an old address, violating principles of natural justice. The petitioner only became aware of the order in September 2025 through the GST portal. Respondents' arguments: The petitioner was duly intimated through the GST portal, which is a valid mode of service under Section 169(1)(d) of the CGST Act, rendering separate physical service unnecessary. The petitioner failed to challenge the orders within the prescribed time and is approaching the court at a belated stage. Reliance was placed on the Supreme Court judgment in Assistant Commissioner (CT), LTU, Kakinada and Others v. M/s. Glaxo Smith Kline Consumer Healthcare Ltd., which held that while a writ petition can be entertained for lack of jurisdiction or violation of natural justice, the High Court may decline if an effective alternative statutory remedy is available and there is delay. The petitioner's approach circumvents statutory remedies.