Kerala High Court
M/S. Ramanattu Motor Corp vs State Of Kerala on 20 February, 2025
Author: Bechu Kurian Thomas
Bench: Bechu Kurian Thomas
W.P.(C) No.23872/24 1
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
THURSDAY, THE 20TH DAY OF FEBRUARY 2025 / 1ST PHALGUNA, 1946
WP(C) NO. 23872 OF 2024
PETITIONER:
M/S. RAMANATTU MOTOR CORP.,
10/560 E, OTTAPPUNNA,
CHERTHALA, ALAPPUZHA,PIN - 688531
REPRESENTED BY ITS MANAGING PARTNER,
SHRI. ABHIN REJU,
BY ADVS.
SMT.G.MINI
SRI.A.KUMAR (SR.)
SRI.P.J.ANILKUMAR
SRI.P.S.SREE PRASAD
SRI.BALASUBRAMANIAM R.
SRI.REGHUNATHAN V.G.
RESPONDENTS:
1 STATE OF KERALA,
REPRESENTED BY ITS SECRETARY (TAXES),
DEPARTMENT OF FINANCE,
GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM, PIN - 695001
2 STATE TAX OFFICER,
TAX PAYER SERVICES CIRCLE,
KERALA STATE GOODS AND SERVICES TAX DEPARTMENT,
MINI CIVIL STATION, CHERTHALA,
ALAPPUZHA, PIN - 688524
3 STATE TAX OFFICER (ARREAR RECOVERY),
OFFICE OF THE JOINT COMMISSIONER,
KERALA STATE GOODS AND SERVICES TAX DEPARTMENT,
ALAPPUZHA, PIN - 688001
W.P.(C) No.23872/24 2
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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
04.02.2025, THE COURT ON 20.02.2025 DELIVERED THE FOLLOWING:
W.P.(C) No.23872/24 3
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"C.R."
BECHU KURIAN THOMAS, J.
--------------------------------
W.P.(C) No.23872 of 2024
---------------------------------
Dated this the 20th day of February, 2025
JUDGMENT
Petitioner challenges the show cause notice and the consequential
order issued under section 73 of the Central Goods and Services Tax Act,
2017/State Goods and Services Tax Act, 2017 (for short 'the GST Act')
imposing tax, interest and penalty.
2. Petitioner is a partnership firm. For the financial year 2018-19,
pursuant to a show cause notice dated 16-11-2023 under section 73(1) of the
GST Act, an order dated 06-03-2024 was issued, imposing a huge liability.
The proceeding that resulted in the above-referred order was allegedly
preceded by a notice dated 03.07.2023 as well, intimating certain
discrepancies in the return filed. Petitioner pleads 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. According to the petitioner,
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
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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.
3. A counter affidavit has been filed on behalf of the second
respondent stating 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'. It is also the case of the respondents 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 respondents contend that at the time of accessing the common portal,
every taxpayer is made aware of the standard operating procedure and there
is a unique structure with unique login credentials, including user-name and
password. It is also stated that the user interface, including the web design, is
in such a way that the common portal is easy to be navigated and accessed
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by registered taxpayers with minimum technical knowledge. Respondents
further pleaded that failure of the party to effectively navigate through the
portal cannot be a reason to challenge the proceedings of the department
and that there is no instance of violation of natural justice.
4. I have heard Sri. A Kumar, the learned Senior Counsel instructed by
Smt. G.Mini, learned counsel for the petitioner as well as Dr. Thushara
James, the learned Senior Government Pleader on behalf of the respondents.
5. Undoubtedly there is a distinction between 'non-service of notice'
and 'not noticing or lack of knowledge of service of notice'. While the former
is a case of certain violation of the principles of natural justice, the latter
cannot have such a legal effect in every situation. 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.
6. In the instant case, concededly, 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. 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',
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unless there are proper instructions on the same page itself, indicating
expressly, the manner in which the portal should be navigated. 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'.
7. The learned Government Pleader took pains to explain to the Court
how the dashboard is operated and illustrated by opening a page of the
portal, as an example. It was noticed that in the page containing the tab for
'Notices and Orders' or 'Additional Notices and Orders', specific instructions
are provided as a 'Note', stating that all matters of adjudication will be posted
in the tab for 'Additional Notices and Orders' while those relating to
registration will be uploaded in the tab for 'Notices and Orders'. However, the
learned Senior Counsel for the petitioner pointed out that the instructions now
seen in the portal were not in existence earlier and the information is now
incorporated after directions from the High Court of Madras.
8. In this context, it is relevant to notice the decision of the Madras High
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Court in M/s. Sabari Infra Private Limited v. Asst. Commissioner (ST)
(W.P. No.22369 of 2023), wherein, a similar situation had arisen. In the said
decision, the instructions in the web portal then existing, were extracted which
is reproduced below:
"How can I view or download the notices and demand orders issued by
the GST authorities?
To view or download the notices and demand orders issued by the GST
authorities, perform the following steps;
1. Access www.gst.gov.inURL. The GST home page is displayed.
2. Login to the GST portal with valid credentials.
3. 'Click the services - user services - view notices and orders
command."
9. Based on the above instructions, the Madras High Court in the
above decision came to the conclusion that the problem arose on account of
the complex architecture of the web portal. It was observed that though the
portal has been designed to facilitate easy access to information, the results
were otherwise. The aforesaid observations reveal that there was no
information in the portal at that point in time, that the notices of adjudication or
determination alone would be posted in the tab for 'Additional Notices and
Orders'. The significance of the abovementioned observation arises in view of
another decision of the Delhi High Court in Anhad Impex and Others v.
Assistant Commissioner, Ward-16, Zone-2 and Others
[MANU/DE/1282/2024] wherein, after referring to the observations of the
Madras High Court in M/s. Sabari Infra's case (supra), extracted earlier, it
was held that, in a subsequent decision in Murugesan Jayalakshmi vs.
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State Tax Officer (Writ Petition No.2746/2024), the Madras High Court itself
had observed that the issue noted in M/s. Sabari Infra's case has been
addressed by the GST authorities and the portal has been redesigned and
both the "View Notices" tab and "View Additional Notices" tab are made under
one heading. In the said case, the Division Bench of the Delhi High Court set
aside the order of determination and permitted the petitioner to file a
response to the show cause notice and directed a fresh adjudication.
10. In view of the above decisions, it is evident that the portal as it is
now visible, was not the manner in which it was prevailing in 2023.
11. In the present scheme, the tabs for view 'Notices and Orders' and
'Additional Notices and Orders' are placed on the same page where a 'Note'
is prescribed at the bottom, giving appropriate information on how to navigate
through the different tabs. The following is the 'Note' now existing:
"Note:
1. Following Notices/Orders issued by tax authorities are available under
"Notices and Orders".
Notice/Orders/Intimations pertaining to registration including new
registration, amendment, cancellation, revocation and other
communications.
Notices issued by System to return defaulters in Form GSTR-3A.
Notices pertaining to Return module comprising GST DRC-01B and GST
DRC-01C
Summary of assessment orders issued in Form GST DRC-07 where
notices and other proceedings were held offline.
2. Following Notices/Orders issued by tax authorities are available under
"Additional Notices and Orders."
Notices/Orders pertaining to modules Advance Ruling, Appeal,
Assessment/Adjudication, Audit, Enforcement, Prosecution and
Compounding, Recovery, LUT etc.
3. Notices/Orders pertaining to Refund module will be shown under case details
page of respective ARN of refund. Please navigate to 'Services>User Services>
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My application' and select ARN under Application Type as 'REFUNDS'."
12. It is evident that the above instructions, now incorporated in the
page, to view notices or additional notices, were not in existence earlier.
There is nothing to indicate the date when this change was incorporated.
Respondents have not been able to either illustrate or specifically point out
when the change was brought about. A perusal of the judgments mentioned
above clearly reveals that as on 31.07.2023, when the judgment in
M/s.Sabari Infra Private Limited was rendered, the web portal did not
contain the instructions as it exists now, while, from the judgment of the Delhi
High Court in Anhad Impex, it is evident that, by 16.02.2024 the changes, as
are now seen, were incorporated.
13. In the instant case, Ext. P3 and Ext. P4 notices were issued on
03.07.2023 and 16.11.2023, both of which are before the decisions in M/s.
Sabari Infra Private Limited (supra) as well as that in Anhad Impex (supra).
It is therefore evident that the web portal as it now stands is different from
what existed earlier. The scheme of arrangement of the portal was confusing
and vague earlier, to identify where the notices for determination would be
posted.
14. Considering the circumstances mentioned above, this Court is
satisfied that the petitioner was unaware of the notice and was even not
properly served with the notices due to the vagueness of the system. The
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lack of knowledge of the notice issued to the petitioner is therefore
attributable to the respondents. Thus, there was neither any proper service of
notice nor was sufficient opportunity granted to the petitioner to contest the
matter. Therefore, it is essential that the order of determination dated
06.03.2024 be set aside and the petitioner be granted an opportunity to file
response to Ext.P3 and Ext.P4 notices.
15. Hence, Ext.P1 order of determination is set aside, and the
petitioner is granted an opportunity to file a reply to Ext.P3 and Ext.P4 notices
within 30 days from today. If any reply is filed within the time mentioned
above, the second respondent shall consider the matter afresh, after granting
an opportunity of hearing to the petitioner. Otherwise, the respondent will be
at liberty to proceed in accordance with law.
The writ petition is allowed as above.
Sd/-
BECHU KURIAN THOMAS
JUDGE
vps
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APPENDIX OF WP(C) 23872/2024
PETITIONER EXHIBITS
Exhibit P1 TRUE COPY OF THE ORDER UNDER SECTION 73 DATED
6.3.2024 ISSUED BY THE 2ND RESPONDENT.
Exhibit P2 TRUE COPY OF THE REVENUE RECOVERY NOTICE
DATED 1.6.2024 ISSUED BY THE 3RD RESPONDENT.
Exhibit P3 TRUE COPY OF THE FORM GST ASMT 10 DATED
3.7.2023.
Exhibit P4 TRUE COPY OF THE SHOW CAUSE NOTICE DATED
16.11.2023.
Exhibit P5 TRUE COPY OF THE SCREEN SHOT OF ADDITIONAL
NOTICES/ORDERS.
Exhibit P6 TRUE COPY OF THE SCREEN SHOT NOTICES AND
ORDERS.
