Delhi HC Quashes Order, Says Reminder Cannot Validate Improperly Served GST SCN | Biz Flow Kit

The Delhi High Court has set aside a GST demand order after determining that the show cause notice (SCN) was not appropriately served on the taxpayer, holding that a reminder issued for such an SCN cannot be considered as a valid communication.

Therefore, a bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul set aside a GST demand order after determining that the show casue notice had not been perfectly communicated to the particular applicant.

The demand has been contested by the applicant issued under section 73 of the Delhi Goods and Services Tax Act, 2017, claiming that the SCN was uploaded on the GST portal under the “Additional Notices” tab and was not brought to its knowledge. Consequently, no response could be submitted, and the order was passed without a chance of a hearing.

Recommended: How GST Software Handles Notices & Hearings Easily U/S 73

The revenue authorities said that a reminder had been issued after revisions were made to the GST portal and that, as a result, the applicant had adequate notice of the proceedings.

The Court denying this claim mentioned that:

“reminder pertained to the SCN uploaded before 16th January, 2024, in the same ‘Additional Notices Tab “in which the SCN itself had been uploaded, a tab, in which the SCN was not visible to the petitioner. In such circumstances, where the SCN itself was never effectively served upon the petitioner, any subsequent communication styled as a reminder in respect thereof cannot, in law, be treated as a valid or effective reminder to the said SCN.”

The Court said that after 16th January, 2024, specific revisions were rolled out on the GST portal and the additional notices tan were made visible. But, in the existing case, the SCN had been issued before the cited date.

“In such circumstances, and considering that the petitioner was not afforded a proper opportunity of hearing and had not filed any reply to the SCN, this Court is of the view that the matter deserves to be remanded to the concerned Adjudicating Authority,” the Court mentioned.

Consequently, the tribunal set aside the contested demand order and allowed the applicant additional time to respond to the SCN.