Information Technology Act Provisions Regarding Service Of Notice Inapplicable To Service Under GST Act: Allahabad High Court

The six modes of service provided under Section 169(1) of the State/Central GST Act are: (a) tendering directly or by messenger; (b) dispatch by speed post, etc. with acknowledgement due; (c) sending communication by email; (d) by making available on the common portal; (e) by publication in a newspaper and; (f) by affixation.

While observing that uploading show cause notices/ orders on GST portal/ email is valid procedure and that no priority exists in procedures (a) to (e), as listed above, the bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla held

“To the extent there is no acknowledgement generated and further to the extent the GSTN and the revenue authorities are unaware and therefore unable to inform when any notice or order dispatched through electronic mode (made available on the Common Portal designed and managed by the GSTN), may have been retrieved or downloaded by the addressee, no inference may be drawn as to the actual date and time of such service, in terms of section 12 and 13 of the IT Act, for the purpose of Section 107 of the State/Central Acts.”

The Court also held that there is no conflict between the GST and Information Technology Act regarding service attempted through electronic modes as Section 4, 12 and 13 of the latter are no applicable to service made under Section 169 of the former.

Further, the Court held that where there is conflict between date of communication through online and physical mode, the date of communication through offline/physical mode may prevail over service through electronic mode unless otherwise proved by one of the parties.

Various petitioners approached the High Court against adjudication orders under Section 73/74 of the GST Act, alleging that they were not served upon the assesee and only upon recovery or other consequential proceedings being initiated, did the assesses gain knowledge of the orders. Since the period of limitation as per Section 107 of the GST Act had expired, assesses approached the High Court.

The question before the Court was whether the orders had been 'communicated' to the petitioners within the meaning of Section 107 of the GST Act for the purpose of deciding limitation. Accordingly, the question as to what constituted 'deemed service' under Section 169 of the State/ Central GST Act was also raised before the Court.

Noting that numerous petitions were flooding the High Court from 59 districts in the State of UP, the Court observed that the consistent grievance of the assesses was that notices/ orders were not being served upon them.

In M/s Riya Construction vs State of U.P. & 3 Ors, the Allahabad High Court had observed that no show cause notice had been issued the petitioner and no opportunity of hearing was given before passing the ex-parte adjudication orders. It noted that the notices and orders were being primarily served through online mode and many times alerts were not going to the assesses because which there was delay in filing appeal and consequently their right to appeal was being lost due to limitation.

The writ petition was disposed with a direction to the authority to provide a copy of the show cause notice along with relevant documents and provide opportunity of hearing. The ex-parte orders were set aside subject to 10% deposit by the petitioner.

The same order was followed by the Court while disposing of more than 2300 cases in a span of almost 2 months. The Court noted that due to the insistence of the Department to serve notice only through online mode, there seemed no end to litigation. It was observed that the only few cases of Central GST had been before the High Court as services were made through both physical and online mode.

Taking note of the population, digital literacy, and diversity in traders in the State of U.P., the Court observed

“Though it cannot be denied that in future, the mode of communication may move to and be more convenient to all users, through electronic platforms only, at the same time that fast sharp (reformative) turn made by the State revenue authorities occasioned solely upon enforcement of the GST regime, may have left a large section of the assessees bemused and disbalanced, quite like a carriage being pulled by a galloping horse, over a sharp bend. They may have been caught off guard/ill-prepared and thus forced to falter, for that reason as well.”

The Court also noted that the GSTIN portal was functioning in English language whereas majority of the population may not even know or understand the language. It held that the authorities were presuming that the assesses would be accessing the portal if not by themselves then through some hired professional. It also noted that there was no mechanism to find out the date and time as to even the portal was being accessed by the assesee.

Noting the scheme of Section 169 of the Act, the Court observed that Sub-sections (2) and (3) of Section 169 of the State/Central Acts create a deeming fiction of service when the notices/ orders have been 'tendered' or 'published' or 'affixed'. It noted that a separate deeming fiction had been created regarding notice by speed post which was different from service by courier.

“While providing for two separate sub-sections creating such specific deeming fiction, the legislature has been careful not to include either dispatch by 'courier' [under sub-clause (b)] or sending communication by email or by making it available on the common portal. That deliberate omission on part of the legislature is a conscious act of wisdom which is not open to contest in these proceedings.”

It held that deemed service only arose for service made directly or through messenger, when made through speed post and not courier, through publication in newspaper and through affixation. Noting that there is no mechanism to find out when the portal or his email was accessed by assesee, the Court observed that the word 'communicated' was deliberately used by the legislature in Section 107, instead of words 'served' and 'received'.

The Court further held

“it is doubtful if effect of (Show Cause Notice or Order) 'communicated' to the assessee may arise in law, merely on the strength of time of such notice or order entering the Common Portal of the GSTN, from where it is possible for the addressee to retrieve such document to record. It is akin to the early stages of postal service where a letter/communication dispatched by post was sorted and kept at the Post Office nearest the addressee, from where he could collect it, at this convenience. In the absence of time stamp being available, when the addressee may have retrieved that communication and further in the absence of any notice with acknowledgment, that determination is not possible or feasible.”

Rejecting the argument of the revenue that uploading on the portal was deemed service, the Court held

“we find that the deeming fiction of law created under Section 169(2) and (3) of the State/Central Act read with Sections 12 and 13 of the IT Act cannot be enlarged – to benefit the revenue, though no prejudice may be caused to it, otherwise. To equate uploading of a document on the Common Portal with 'tendering' or 'by speed post', 'publication' or 'affixation', would be over simplistic, in our humble opinion.”

The Court observed that the assesses were a part of the same system but notices were being issued by two different modes by State and Central Departments creating confusion, duality and uncertainty in procedures.

It held that where an assesee declares that the appeal is within limitation as per his knowledge of communication, the presumption must be in favour of the assesee unless disproved by the revenue by showing 'communication' was at a date prior to the one claimed by the assesee.

Though the Court wanted to make positive suggestions regarding upgrading the portal, it refrained due to the initial reluctance of the GSTN to take any positive criticism. While allowing the writ petitions in terms of the judgment in Ria Constructions, the Court observed

“we leave GSTN with the thought that it is not it's object of incorporation to deal with lakhs of complaints as it already has and to continue to remain rigid in its approach. Rather, its object of incorporation commends that it responds to the need of the times pro- actively, to cater to the needs of the India's growing economy and the traders and business persons who are its users and who trust and rely on such mechanism not for any other reason but to help their businesses grow, that in turn contributes to the economic growth of the country itself.”

Case Title: M/S Bambino Agro Industries Ltd Versus State of Uttar Pradesh and another [WRIT TAX No. - 2707 of 2025]

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