In the matter of M/S. SHRI SHYAM BABA EDIBLE OILS VERSUS THE CHIEF COMMISSIONER AND ANOTHER (W. P. No. 16117/2020 dated 19th November, 2020), the Hon’ble High Court of Madhya Pradesh held that as per Rule 142, the only prescribed procedure for communicating notice and order is uploading the same on GST portal. However, respondent has communicated the same through email and failed to upload on GST portal. As per Trite principle of Law, when a particular procedure is prescribed then all other procedures/modes are excluded. Therefore, Hon’ble High Court held that impugned notice and order, not uploaded on GST portal, is liable to be set-aside.
1. Brief Facts of the case
- The Petitioner filed a grievance before Hon’ble High Court of Madhya Pradesh that the for financial year 2018-2019 was never communicated to him. Therefore, it is a violation of the principle of natural justice.
- As per respondent, the show cause notice was communicated to the petitioner on his Email and despite receiving the same the petitioner failed to file any response.
- The Petitioner referred provisions of Rule 142 of CGST Rules, 2017. Relevant extract of Rule 142 is reiterated below:
“142. Notice and order for demand of amounts payable under the Act.-
(1) The proper officer shall serve, along with the
(a) notice issued under section 52 or section 73 or section 74 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130, a summary thereof electronically in FORM GST DRC-01,
(b) statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof electronically in FORM GST DRC-02, specifying therein the details of the amount payable.
(1A) The proper officer shall, before service of notice to the person chargeable with tax, interest, and penalty, under subsection (1) of Section 73 or sub-section (1) of Section 74, as the case may be, shall communicate the details of any tax, interest, and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A.
- The petitioner contended that as per Rule 142 of the CGST Rules, 2017, the only mode prescribed for communicating the show cause notice and orders are by way of uploading the same on GST portal so that the aggrieved person can be aware of the same. Whereas, The respondent confirmed that the order was communicated through email only and was never uploaded on the portal.
2. Hon’ble High Court held:
- Hon’ble High Court held that As per Rule 142 of CGST Rules, 2019, the only method provided for communicating a notice and order is by the way of uploading it on GST portal.
- Hon’ble High Court further added that when a particular procedure is prescribed in law to perform a particular act then all other procedures/modes except the prescribed one are excluded. This principle becomes all the more stringent when statutorily prescribed as is the case herein.
- Therefore, the respondent has failed to follow the procedure of communication of show cause notice and order by the manner given under Rule 142 of CGST Rules. Therefore, impugned notice and demand order deserved to be struck down.
Similar view was also taken by Hon’ble High Court of Madras in the matter of AKASH GARG VERSUS STATE OF M.P. (W. P. No. 16117/2020) dated 19th November, 2020.
3. Our Comment
Therefore, Hon’ble High Court has held that mere communication of Show Cause Notice and Demand Order is not sufficient unless the communication is carried out through the way provided in statute. Therefore, even if the department send the Show Cause Notice and Demand order through mail and the assessee has complete knowledge of the same, still such communication shall not be considered as valid as it is not done according to Rule 142 of CGST Rules.