GST Demand Order Set Aside Due to SCN Upload in Wrong Portal Tab

I. GST demand order set aside due to SCN upload in wrong portal tab, remanding for fresh adjudication.

II. Challenge to GST limitation extension notification is stayed pending Supreme Court’s decision.

I. GST Demand Order Set Aside Due to SCN Upload in Wrong Portal Tab.

Issue:

Whether a demand order passed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) should be set aside and the matter remanded if the Show Cause Notice (SCN) was uploaded on the “Additional Notices Tab” on the GST portal, preventing it from coming to the assessee’s knowledge, and the impugned order was passed without providing an opportunity to contest the case on merits.

Facts:

• For the period 2018-19, a show cause notice (SCN) was issued to the assessee, and subsequently, an impugned order was passed under Section 73.
• The assessee’s contention was that the SCN, from which the impugned order arose, was uploaded on the “Additional Notices Tab” on the GST portal, and therefore, it did not come to the knowledge of the assessee.
• The assessee further submitted that the impugned order was passed without providing an opportunity to challenge the case on its merits.
• The court referred to a previous similar case, Neelgiri Machinery v. Commissioner Delhi Goods and Service Tax [2025] (Delhi), where under similar circumstances (SCN uploaded via ‘additional notices tab’), the matter was remanded.

Decision I:

The court held in favor of the assessee. Citing the precedent of Neelgiri Machinery, the court accordingly remanded the matter with liberty to the assessee to file a reply to the SCN.

Key Takeaways I:

• Effective Service of Notice: This case reinforces the critical importance of proper and effective service of notices in tax proceedings. Merely uploading a notice on a portal, especially if it’s placed in a non-obvious or less frequently checked section, may not constitute valid service if it demonstrably prevents the assessee from becoming aware of the proceedings.
• Violation of Natural Justice: When an SCN (the very foundation of demand proceedings) is not effectively communicated, it directly leads to the denial of a fundamental opportunity to present one’s case, which is a clear violation of the principles of natural justice.
• Consistency in Judicial Approach: The reliance on the Neelgiri Machinery precedent highlights a consistent judicial stance that such procedural flaws, particularly related to the ‘additional notices tab’ issue on the GST portal, warrant setting aside the impugned orders and remanding the matter for fresh adjudication.
• Remand for Fresh Opportunity: The remedy of remanding the matter with liberty to file a reply ensures that the assessee gets a fair opportunity to contest the demand on its merits, upholding due process.

II. Challenge to GST Limitation Extension Notification Stayed Pending Supreme Court Decision.

Issue:

Whether a High Court should proceed with a challenge to the validity of Notification No. 9/2023-Central Tax, dated March 31, 2023, and Notification No. 56/2023-Central Tax, dated December 28, 2023 (issued by the Central Board of Indirect Taxes and Customs (CBIC) for extending limitation periods), when the same legal question is pending consideration before the Supreme Court.

Facts II:

• The assessee had impugned (challenged) the validity of two Central Tax Notifications:
  • Notification No. 9/2023-Central Tax, dated March 31, 2023, which extended the time limit for passing orders under Section 73(9) for Financial Year 2018-19 up to April 30, 2024.
  • Notification No. 56/2023-Central Tax, dated December 28, 2023, which extended the time limit for Financial Year 2019-20 up to August 31, 2024.
• These notifications were issued under Section 168A of the CGST Act, 2017 (Power to issue removal of difficulty orders).
• It was brought to the court’s attention that the challenge to these notifications was under consideration before the Supreme Court in HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors., S.L.P No. 4240/2025.

Decision II:

The court held that the challenge made by the assessee to the notifications in the present proceedings would also be subject to the outcome of the decision in the said Supreme Court SLP, as the matter was pending before the apex court.

Key Takeaways II:

• Judicial Comity and Efficiency: High Courts consistently defer to the Supreme Court on questions of law that are already being litigated before the apex court. This ensures uniformity and avoids conflicting judgments.
• Significance of Limitation Extension: Notifications extending limitation periods are crucial for taxpayers as they directly impact the period within which assessments or demands can be finalized. Their legal validity is a significant point of contention.
• Stay of Proceedings: The court’s decision effectively places a stay on the High Court’s proceedings regarding the validity of these notifications until the Supreme Court delivers its verdict. This is a procedural relief for the assessee, keeping their challenge alive.
• Outcome Dependent on Supreme Court: The ultimate fate of the assessee’s challenge to the limitation extensions will be determined by the Supreme Court’s decision in the referenced Special Leave Petition.
• “In favour of assessee” (in the initial text): While the outcome of the stay is a procedural win for the assessee (as their challenge is not dismissed), it’s important to note that it’s not a definitive ruling on the merits of the notification’s validity.