The court held that lack of proper service of notice due to vagueness in the GST portal's structure violated the principles of natural justice.

JUDGMENT :

Petitioner challenges the show cause notice and the consequential order issued under section 73 of the Central Goods and Services Tax Act, 2017 /State Goods and Services Tax Act, 2017 (for short ‘the GST Act’) imposing tax, interest and penalty.

2. Petitioner is a partnership firm. For the financial year 2018-19, pursuant to a show cause notice dated 16-11-2023 under section 73(1) of the GST Act, an order dated 06-03-2024 was issued, imposing a huge liability. The proceeding that resulted in the above-referred order was allegedly preceded by a notice dated 03.07.2023 as well, intimating certain discrepancies in the return filed. Petitioner pleads that neither of the two notices mentioned above nor the order of determination were served on the petitioner and that it was unaware of the proceedings until intimation of the recovery proceeding was uploaded in the portal. According to the petitioner, the show cause notice came to the knowledge of the petitioner much later, as it was uploaded in the tab for ‘Additional Notices and Orders’ and not that provided for ‘Notices and Orders’ in the portal. Since petitioner had no reason to verify the tab for ‘Additional Notices and Orders’, when there was no prior notice, the impugned order of determination under section 73 of the Act, according to the petitioner, was issued in violation of the principles of natural justice.

3. A counter affidavit has been filed on behalf of the second respondent stating that the GST common portal is notified under section 146 of the GST Act for facilitating registration, payment of tax, furnishing returns etc., and it acts as a platform for all activities carried out under the statute. It is also pleaded that if a taxpayer goes to the ‘User Services’, in the portal, the drop-down page of ‘Notices and Orders’ and ‘Additional Notices and Orders’ are clearly shown and while registering on the common portal, every dealer is taken through a detailed tutorial, explaining the workings of the portal, including the purposes of the tab meant for 'Notices and Orders' and that for 'Additional Notices and Orders'. It is also the case of the respondents that the drop-down page of ‘Notices and Orders’ pertains to administrative matters like registration, while, ‘Additional Notices and Orders’ pertain to matters of adjudication and hence the design of serving notices relating to adjudication assessment can only be uploaded in the ‘Additional Notices and Orders’ tab. The respondents contend that at the time of accessing the common portal, every taxpayer is made aware of the standard operating procedure and there is a unique structure with unique login credentials, including user-name and password. It is also stated that the user interface, including the web design, is in such a way that the common portal is easy to be navigated and accessed by registered taxpayers with minimum technical knowledge. Respondents further pleaded that failure of the party to effectively navigate through the portal cannot be a reason to challenge the proceedings of the department and that there is no instance of violation of natural justice.

4. I have heard Sri. A Kumar, the learned Senior Counsel instructed by Smt. G.Mini, learned counsel for the petitioner as well as Dr. Thushara James, the learned Senior Government Pleader on behalf of the respondents.

5. Undoubtedly there is a distinction between ‘non-service of notice’and ‘not noticing or lack of knowledge of service of notice’. While the former is a case of certain violation of the principles of natural justice, the latter cannot have such a legal effect in every situation. Lack of knowledge of service of notice can amount to a violation of principles of natural justice only in certain limited circumstances. When lack of knowledge is attributable to the default of the sender of the notice, then ‘not noticing or lack of knowledge of service of notice’ can amount to a negation of the principles of natural justice.

6. In the instant cas