CGST Act | Bombay High Court Stays GST Demand Order Over Delayed Service Of Showcause Notice

The Bombay High Court granted ad-interim relief to the assessee by staying the operation of a GST Demand Order The Bench of Justice B.P. Colabawalla & Amit S. Jamsandekar was hearing a writ preferred by the assessee seeking to quash the GST demand order challenging the Show Case Notice to be time barred per Section 73(2) and 73(10) of the Central Goods and Services Tax (CGST) Act, 2017. The Petitioner argued that the Show Cause Notice did not follow the mandatory provisions under Section 73(2) read with 73(10) of the CGST Act. The Show Cause Notice was served on the authorised registered email address of the Petitioner was delayed, making the initiation of proceedings beyond limitation. It was further submitted that although an earlier email ID was provided at the time of GST registration, the authorised signatory and email ID had been updated on the GST portal and all subsequent departmental correspondence including GST audit communications and the Pre-SCN consultation were exchanged on the updated ID. Despite this, the Show Cause Notice was initially served on the old email ID of the assessee, used at the time of applying for registration with the GST portal. The Assessee also contended that the GST demand order did not follow the precedent of Vodafone Idea Limited v/s The Union of India & Ors [2022 SCC Online Bom 1485] on territorial jurisdiction under GST matters of the High Court. The Bench observed that the GST Department was fully aware of the updated authorised email ID (updated on the GST portal) and yet initially served the Show Cause Notice on an old email address. The Court observed: “For all these reasons, we are of the opinion that the Petitioner has made out a strong prima facie case for stay of the operation of the impugned order. We must hasten to clarify that as far as the issue of Show Cause Notice being time barred is concerned, the same will apply to Financial Year 2020-2021. The same would not apply to Financial Year 2021-22 which was also the subject matter of the Show Cause Notice as well as the impugned order. However, not considering the arguments of the Petitioner especially in relation to the applicability of the judgment of Vodafone Idea Limited (supra), will apply to both financial years.” In light of the above, finding a strong prima facie case, the Court stayed the demand order, clarifying that the SCN was time barred. Case Titled: Octantis Services Pvt Ltd. Vs Union Of India And Anr Case Number: Writ Petition No. 6043 Of 2023 Appearance for Petitioner: Mr. Darius Shroff, Senior Advocate, With Ms. Kriti Kalyani, Yash Karunakaran, Richa Bharti I/B Shardul Amarchand Mangaldas & Co Appearance for Respondents: Mr. Ram Ochani, With Sangeeta Yadav, Ashutosh Mishra Click Here To Read/Download The Order

CGST Act | Bombay High Court Stays GST Demand Order Over Delayed Service Of Showcause Notice

Rajnandini Dutta

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