The Kerala High Court has distinguished between the terms ‘Non-Service Of Notice’ And ‘Lack Of Knowledge Of Service Of Notice’ under GST.
The bench of Justice Bechu Kurian Thomas has observed that there is a distinction between ‘non-service of notice’ and ‘not noticing or lack of knowledge of service of notice’. While ‘non-service of notice’ is a case of certain violation of the principles of natural justice, ‘not noticing or lack of knowledge of service of notice’ cannot have such a legal effect in every situation.
The bench stated that 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.
The bench noted that the notice that preceded the order of determination under section 73 of the GST Act was posted in the portal of the petitioner in the tab meant for ‘Additional Notices and Orders’. There was yet another tab for ‘Notices and Orders’. Normally, every person will access the tab meant for ‘Notices and Orders’ to check whether any notices have been issued.
The bench stated that in the absence of any notices uploaded in the tab for ‘Notices and Orders’, a person may not check the tab for ‘Additional Notices and Orders’, unless there are proper instructions on the same page itself, indicating expressly, the manner in which the portal should be navigated.
The Petitioner/assessee is a partnership firm. For the financial year 2018-19, pursuant to a show cause notice under section 73(1) of the GST Act, an order was issued, imposing a huge liability. The proceeding that resulted in the above-referred order was allegedly preceded by a notice as well, intimating certain discrepancies in the return filed.
Petitioner pleaded 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.
The petitioner contended that 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.
The department contended 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’.
The department contended 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 court held that Of course, while accessing the portal, every taxpayer is bound to peruse every window. However, for all practical purposes, a taxpayer will not read through every user information given in all the windows to comprehend the mode in which the pages should be navigated. In the absence of specific notes or instructions given on the same page meant for ‘Notices and Orders’ or ‘Additional Notices and Orders’ it cannot be assumed that there has been an effective dissemination of information to taxpayers that the first notice regarding determination under section 73 or 74 of the GST Act will be uploaded only in the tab meant for ‘Additional Notices and Orders’.
The court noted that there was neither any proper service of notice nor was sufficient opportunity granted to the petitioner to contest the matter.
Case Details
Case Title: M/S. RAMANATTU MOTOR CORP. Versus STATE OF KERALA
Case No.: WP(C) NO. 23872 OF 2024
Date: 20/02/2025
Counsel For Petitioner: G.Mini
Counsel For Respondent: Dr. Thushara James
Read More: Customs Intercepts Exotic Wildlife Smuggling At IGI Airport
