Introduction
The Hon’ble Calcutta High Court (‘CHC’) quashed an attachment order passed by the GST authorities in the matter of Sukumar Kundu v. Union of India & Ors[i]. The CHC held that the Petitioner could not have been denied the chance to respond to the show cause notice (‘SCN’) issued and the ex-parte order passed by the Respondent. The SCN and ex-parte order were uploaded in the wrong section of the portal, i.e., in the ‘view additional notices and order’ instead of uploading it in the ‘view notices and order,’ causing confusion amongst the Petitioner. The CHC, therefore, granted the Petitioner permission to approach the Appellate Authority (‘AA’) with an application to condone the delay and consequently set aside the attachment order.
Brief Facts
The Respondent had initiated proceedings against the Petitioner and had issued a SCN dated 26.07.2023, which was uploaded in the wrong section of the portal, i.e., in the ‘view additional notices and order’ instead of being uploaded in the ‘view notices and order’ section.
The Respondent also passed an ex-parte order dated 28.08.2023 (‘Impugned Order’), which was also uploaded to the wrong section of the portal.
The Petitioner only became aware of the issuance of the SCN and the Impugned Order when he received a communication from his bank on 21.02.2024 vide form GST DRC – 13 attaching his bank account.
The Petitioner also contended that only 15 days were granted to the Petitioner, although 30 days of time could have been granted as per the provisions of the Central Goods and Services Tax Act, 2017 (‘Act’).
Aggrieved by the wrong uploading of the SCN and the Impugned Order in the wrong section of the portal and the invalid service, the Petitioner appealed before the CHC.
Observations
The CHC observed that the Petitioner was given 15 days to respond to the SCN, and the Impugned Order was passed after 30 days. Despite this extended timeframe, he failed to submit any response. The Petitioner had the opportunity to submit a response before passing the Impugned Order, and there was no violation of the provisions of the Act. Therefore, it was held that it cannot be said that the Petitioner was not given an opportunity to respond to the SCN.
More importantly, the CHC did not examine whether the uploaded SCN and the Impugned Order on the portal complied with s. 169(1)(d) of the Act or not.
The CHC noted that there was confusion caused by the portal layout, and therefore, the Petitioner was permitted to approach the AA in a period of 6 weeks along with a request to condone the delay, which the AA may condone if the Petitioner complies with the pre-deposit requirements.
In view of the facts and circumstances, the CHC allowed the Petitioner an opportunity to file an appeal, condoned the delay before the AA, and set aside the attachment order.
Conclusion
In this case, the CHC permitted the Petitioner to approach the AA by condoning the delay. However, the Petitioner had to bear the pre-deposit amount for no fault of his; therefore, this decision proves to be harsher than the re-adjudication of the SCN as permitted by other High Courts. It is pertinent to note one such case of M/s East Coast Constructions and Industries Limited, represented by its General Manager Finance S. Suresh v. Assistant Commissioner (ST) Nungambakkam[ii], where the Delhi High Court had granted the Petitioner an opportunity to respond to the SCN and thereafter, permitted the GST Authorities to re-adjudicate the Impugned SCN.
Consequently, the CHC also did not discuss why uploading the SCN in the wrong section, like ‘view additional notices and orders’ instead of the prominent ‘view notices and orders’ section, is not a valid service under s. 169 (1) (c) of the Act. The CHC, furthermore, gave no reasoning as to why the service was not valid as per s. 169 (1)(c) of the Act, and therefore, the findings of the CHC seem to be unreasoned and inconsiderate.
End Notes
[i] Sukumar Kundu Versus Union of India & Ors, WPA 12124 of 2024.
[ii] [2024] 163 taxmann.com 17 (Delhi)[10-05-2024].
Authored by Aishwarya Pawar, Advocate at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion
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