Delhi High Court Allows Appeal Despite Assessee's Failure to Check GST Portal Diligently

New Delhi: In a significant order, the Delhi High Court has provided relief to a taxpayer who failed to respond to a Goods and Services Tax (GST) show-cause notice, ruling that a lack of diligence in checking the official portal does not completely bar the assessee from their statutory right to appeal.

A Division Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta , while observing that the department could not be blamed for the petitioner's oversight, permitted the taxpayer to file a statutory appeal against the demand order.

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Background of the Case

The writ petition was filed by Mr. Sandeep Garg, proprietor of M/s Aares Spring Industries, challenging a demand order dated April 16, 2024, which imposed a total liability of ₹9,21,326. The petitioner contended that the order was passed in violation of the principles of natural justice as he was never served the initial Show Cause Notice (SCN) dated December 26, 2023, and was thus denied an opportunity to be heard.

Arguments from Both Sides

The petitioner, represented by Advocate Rajeev Aggarwal, argued that the SCN was not properly served because it was uploaded in the 'additional notices and orders' tab on the GST portal, rather than the primary 'notices and orders' section. The petitioner’s counsel further claimed that the portal was not functioning at the time, which prevented their accountant from accessing it and discovering the notice.

The respondent, the Sales Tax Officer, represented by counsel Ms. Vaishali Gupta, countered this argument effectively. She pointed out that a reminder notice was subsequently issued on February 9, 2024, which was clearly visible on the portal, as evidenced by a screenshot submitted to the court. The respondent’s counsel also submitted that automated emails and SMS alerts are dispatched whenever any notice or order is uploaded to the portal, implying the petitioner had multiple avenues of notification.

Court's Observations and Ruling

The High Court bench examined the evidence, particularly the screenshot of the portal showing the reminder notice. The court noted that despite the clear visibility of the reminder, the petitioner failed to file a reply.

In its order, the court observed that the petitioner was not diligent in monitoring the GST portal. It stated, "Since the Petitioner has not been diligent in checking the portal, no reply to the Show Cause Notice has been filed by the Petitioner. Thus the department cannot be blamed."

However, taking into account the facts and circumstances, the court decided to grant the petitioner a final opportunity to contest the demand on its merits. The bench exercised its writ jurisdiction to direct the petitioner towards the statutory remedy available under the GST regime.

The court ruled:

"However, in the facts and circumstances of this case, the Petitioner is permitted to file an appeal against the impugned order before the Appellate Authority under Section 107 of the Central Goods and Service Tax Act, 2017 along with the pre-deposit on the tax amount in terms of the said provision."

Final Decision and Implications

The High Court disposed of the writ petition with a crucial directive: if the petitioner files the appeal within 30 days from the date of the order (May 5, 2025), the Appellate Authority must adjudicate it on its merits and not dismiss it on the grounds of limitation.

This judgment underscores the importance for taxpayers to remain vigilant in checking all sections of the GST portal. At the same time, it reflects a judicial inclination to preserve the substantive right of appeal, even in cases of procedural lapses, provided the assessee complies with statutory conditions like pre-deposit for filing an appeal.