In a recent judgment that underscores the importance of due process in tax matters, the Hon'ble Delhi High Court delivered a significant decision in the case of Anhad Impex v. Assistant Commissioner [Writ Petition (Civil) No. 2356 OF 2024 dated February 16, 2024]. The judgment, dated February 16, 2024, addressed the issue of whether the misplacement of a Show Cause Notice (SCN) on the GST portal could invalidate subsequent demand orders.
Background
M/s. Anhad Impex, the Petitioner in this case, challenged an Impugned Order dated November 29, 2023, issued by the Assistant Commissioner under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act). The crux of the Petitioner's argument lay in the fact that they never received the SCN, which led to the Impugned Order being passed without their participation in the adjudication process.
The Petitioner pointed out that SCNs are typically uploaded under the "Notices" section on the GST portal, ensuring easy accessibility for taxpayers. However, in this instance, the SCN was placed under "Additional Notices," a less visible section on the portal, resulting in the Petitioner missing crucial information about the demand until the receipt of the Impugned Order.
The Issue
The central question before the Delhi High Court was whether the improper placement of the SCN on the GST portal warranted the invalidation of the subsequent demand order.
Court's Analysis and Decision
Upon considering arguments from both sides and referring to relevant legal precedents, the Delhi High Court made several key observations and rulings:
The Impugned Order noted the Petitioner's non-response to the SCN, indicating a lack of proper intimation to the Petitioner regarding the SCN.
Placing the SCN under "Additional Notices" instead of "Notices" on the GST portal, contrary to standard practice, resulted in the Petitioner missing important communication.
The Court emphasized that mere uploading of the SCN on the portal, especially in a less accessible category, does not fulfill the requirements of natural justice and statutory provisions under the CGST Act.
Citing the case of East Coast Constructions & Industries Ltd. v. Asstt. Commissioner and a recent judgment from the Madras High Court, the Delhi High Court highlighted the need for clarity and accessibility in tax-related communications on the GST portal.
Recognizing the changes made to the GST portal's design following the Madras High Court's directives, the Delhi High Court set aside the Impugned Order and directed the Respondent to re-adjudicate the SCN after considering the Petitioner's response and granting a personal hearing.