Delhi High Court Holds Improper Service of GST SCN; Case Remanded for De Novo Adjudication

Background and Context

The Delhi High Court, in the matter of NHD Motors Vs Government of N.C.T, examined whether a Show Cause Notice (SCN) under the Delhi Goods and Services Tax Act, 2017 could be treated as properly served when it was only uploaded in the “Additional Notices Tab” of the GST portal, which was not effectively visible to the assessee at the relevant time.

The petition was instituted under Article 226 of the Constitution of India challenging:

  • A Show Cause Notice dated 9 December 2023 issued under Section 73 for the Financial Year 2018–19, and
  • The consequential order dated 5 April 2024 passed by the Sales Tax Officer, Class II/AVATO, Ward 63, Zone 6, Delhi, which created a GST demand of ₹2,23,67,282 against the assessee-firm.

The assessee, M/s NHD Motors, is a GST-registered partnership firm (GSTIN: 07AAMFN6084D1Z3). The central grievance was that the SCN was never effectively brought to its notice, as it was placed only in the “Additional Notices Tab” of the GST portal. Consequently, no reply could be furnished and the adjudication order was passed ex parte without a fair opportunity of hearing.

Challenge to the SCN and the Impugned Order

Core Arguments of the Assessee

The assessee raised the following key contentions before the Court:

  1. Lack of Effective Service of SCN

    • The SCN dated 9 December 2023 was uploaded not under the usual “Notices & Orders” section, but only in the “Additional Notices Tab” of the GST portal.
    • At the time of issuance, this tab was not clearly visible or accessible to the assessee in the ordinary course of portal usage.
    • Due to this, the assessee claimed it was unaware of the existence of the SCN and could not file any response.

  2. Violation of Natural Justice

    • Since no reply was filed and no meaningful opportunity of personal hearing was granted, the adjudicating authority passed the order dated 5 April 2024 in default.
    • The assessee argued that this resulted in a clear denial of the principles of natural justice, especially the right to be heard before a substantial demand of ₹2,23,67,282 is fastened.

  3. Dispute on Tax Computation

    • The assessee also contended that the demand itself was based on erroneous calculations.
    • It was specifically asserted that no excess Input Tax Credit had been claimed or availed, and that the GST Department had miscalculated the liability.

Stand of the Respondent Department

The respondent authorities broadly argued that:

  • The SCN was indeed uploaded on the portal, and therefore, as per them, due service had been effected.
  • Further, a reminder dated 27 February 2024 was also uploaded after changes were made to the portal interface on 16 January 2024, by which time the “Additional Notices Tab” had become visible.
  • On this basis, they maintained that the assessee had notice of the proceedings and cannot claim denial of opportunity.

Court’s Examination of Service via “Additional Notices Tab”

Reference to Prior Decisions on the Same Issue

The Court noted that similar controversies had arisen in several earlier writ petitions where SCNs were only uploaded in the “Additional Notices & Orders” tab. The Court specifically referred to and relied upon its earlier rulings, including: