Adjudication Order Quashed due to Non-Service of SCN; GST Portal "Glitches" Acknowledged

Adjudication Order Quashed due to Non-Service of SCN; GST Portal “Glitches” Acknowledged

Issue

Whether an adjudication order passed under Section 73 creates a valid demand when the assessee was never served the Show Cause Notice (SCN), received no alerts, and was denied an opportunity for a personal hearing due to the notice not being readily visible on the GSTN Portal.

Facts

Period: 2020-21.
The Demand: The Department created a tax demand of Rs. 1,61,225.64 against the assessee.
Assessee’s Plea: The assessee argued that:
1. No Show Cause Notice (SCN) was ever received prior to the order.
2. No date for filing a reply or personal hearing was communicated.
3. The date of service of the final order itself was doubtful, preventing a timely appeal.
Systemic Issue: The core grievance was that notices served solely via the portal often trigger no SMS/Email alerts and are hidden in obscure tabs, making them difficult to detect.

Decision

Judicial Notice of Portal Issues: The High Court acknowledged a critical reality: “Show cause notices and orders are served only through online mode, but many times alerts are not sent, and notices are not readily visible on the GSTN Portal.”
Loss of Remedy: The Court noted that because Appellate Authorities have rigid limitation periods (and no power to remand in some contexts), late service of an order often kills the assessee’s right to appeal. Furthermore, deciding the matter directly at the appellate stage denies the assessee their primary right to defend themselves before the Adjudicating Authority.
Order Quashed: To serve the ends of justice, the Writ Petition was allowed. The impugned adjudication order was set aside.
Condition: The relief was subject to the assessee depositing 10% of the disputed demand with the department.
Direction: The matter was remanded for re-adjudication. The Department was directed to issue a fresh SCN and provide a proper opportunity of hearing.

Key Takeaways

“Hidden” Notices are not Valid Service: Courts are increasingly striking down orders where the SCN was uploaded to the “Additional Notices” tab without an accompanying email/SMS alert, treating it as a violation of natural justice.
Two-Stage Defense: You have a right to be heard by the Adjudicating Authority before you are forced to go to the Appellate Authority. If the first stage is skipped (ex-parte), the order is liable to be quashed.
Pre-deposit is Mandatory: Even when you win on a procedural error (like non-service), Courts often require a token pre-deposit (usually 10%) to prove bona fides before remanding the case.

HIGH COURT OF ALLAHABAD

Riya Construction

State of U.P.^*

Saumitra Dayal Singh and INDRAJEET SHUKLA, JJ.

WRIT TAX No. 3964 of 2025

OCTOBER 9, 2025

Amit Kumar Singh and Santosh Kumar Srivastava for the Petitioner. Ankur Agarwal, Ld. Counsel for the Respondent.

ORDER

1. Ms. Farheen, learned Advocate holding brief of Shri Santosh Kumar Srivastava, learned counsel for the petitioner, Shri Ankur Agarwal, learned counsel for the Revenue and perused the record.

2. The present writ petition has been filed challenging the Adjudication Order dated 04.02.2025 passed under Section 73 of the UPGST Act passed by respondent no.3 creating a demand of tax of Rs.1,61,225.64/-for the FY 2020-21.

3. Submission is, no show cause notice was ever issued to the petitioner prior to the impugned order being passed and in any case, no date of filing of reply or personal hearing was communicated to the petitioner before the impugned order came to be passed. Also, the date of service of the adjudication order has been doubted. Pleadings to that effect exist.

4. In many similar matters arising from same/similar mistakes committed by the Adjudicating Authorities, we have been setting aside such orders, conditionally. Hundreds, if not thousands of petitions have arisen, on same or similar grounds, clearly indicating to the Court, widespread difficulties being faced by numerous registered persons.

5. Primarily, it is being noted, show cause notices and adjudication orders are being served only through online mode. In that, many times alerts are not being sent to the noticees and in any case the notices and orders are often not readily visible on the GSTN Portal. Further, it has been noted, besides rigid/fixed period of limitation with limited power to condone the delay, the Appeal Authorities do not have the power to set aside/remand the proceedings, to the Adjudicating Authority. Thus, many times the right of appeal is lost to the aggrieved assessees, for reason of late service of Adjudication Order. Even, if the Appeal Authorities were to pass an order on merits, it would still take away one opportunity of hearing that is otherwise available to the noticee, to represent its case, under the scheme of the Act.

6. While there may be some merit in the objection being raised by the petitioner, that facts are otherwise, in the first place a coordinate bench in Mahaveer Trading Company v. Deputy Commissioner, State Tax (Allahabad)/ Neutral Citation No.-2024:AHC:38820-DB, a coordinate bench took note of similar and other violations of rules of natural justice, by Adjudicating Authorities and thus set aside the Adjudication Order.

7. Again in another order passed by a coordinate bench in Shubham Steel Traders v. State of U.P. GST 164/86 GSTL 77 (Allahabad), Neutral Citation No 2024: AHC:31108-DB, it has been observed as below:

“10. Rules of natural justice ensure fairness in proceedings. Once the authority had fixed the matter for hearing on 06.11.2023 it was incumbent on that authority either to pass the order or to fix another date and communicate the same to the petitioner. Communication of the other date was necessary as according to the assessing authority the petitioner failed to appear before it on the date fixed on 06.11.2023.

11. By not passing the order on 06.11.2023 and not communicating the next date fixed in the proceedings, the assessing authority forced the ex-parte nature of the order on the petitioner, by its own conduct.”

8. In view of our consistent view in similar matters, no useful purpose would be served in keeping this writ petition pending or calling for counter affidavit, at this stage.

9. Accordingly, the writ petition is allowed and the impugned order is set aside, subject to the petitioner depositing Rs.16,000/- within a period of one month from today. Present writ petition is disposed of with the following directions:

(i)

Subject to the above deposit being made by the petitioner, the Adjudicating Authority shall make available to the petitioner copy of the show cause notice together with any additional/supplementary notice etc issued in these proceedings together with copies of Relied Upon Documents (‘RUDs’ in short) within a period of two weeks from the date of compliance shown by the petitioner.

(ii)

Petitioner shall file reply, if any, within a further period of four weeks therefrom.

(iii)

Thereupon the respondent No. 3 shall fix appropriate date for hearing and communicate the same to the petitioner in the manner prescribed by law with at least two weeks’ advance notice.

(iv)

Petitioner undertakes to cooperate and participate in the proceedings and not seek any undue or long adjournment.

10. It is expected that the proceedings thus remitted would be concluded within six months from the date the petitioner makes first compliance under this order and deposits the amount specified above.