Is Portal-Based Notice Sufficient? Madras High Court’s Key Ruling

Introduction

The recent judgment by the Madras High Court has sparked significant discussions regarding the valid service of notices under Section 169 of the Central Goods and Services Tax (CGST) Act, 2017. The case highlights whether uploading notices solely on the GST portal satisfies the statutory requirement or whether additional modes of service, such as registered post or email, are mandatory. This blog unpacks the judgment’s implications and explores how it aligns with natural justice principles and statutory obligations.

Section 169 of the CGST Act: Modes of Service

Section 169 outlines multiple methods for serving notices to taxpayers. These include:

1. In-person delivery.
2. Registered post or courier to the taxpayer’s last known address.
3. Communication to the registered email ID.
4. Publication on the GST portal or in a newspaper.

The statute mandates these methods as alternatives, not substitutes, ensuring that taxpayers are adequately informed.

The Case in Question

Case Title: Udumalpet Sarvodaya Sangham v. The Authority
Case Number: W.P.(MD)Nos.26481

The petitioner alleged non-compliance with Section 169, arguing that the department served notices solely via the GST portal without using other prescribed methods. This, according to the petitioner, violated the principles of natural justice by denying them a fair opportunity to respond.

The department countered, stating that taxpayers are obligated to regularly check the portal and respond to notices issued there.

Key Takeaways from the Judgment

1. Service Through Portal Alone Is Insufficient

The Court held that reliance solely on the GST portal does not fulfill the statutory requirements. The judgment emphasized that Section 169 mandates alternative modes like personal delivery, registered post, or email before resorting to publication on the portal or in a newspaper.

2. Natural Justice at the Core

The Bench highlighted the importance of natural justice, stating that taxpayers must be informed through effective channels to ensure fair participation in the proceedings.

3. Rules Cannot Override Statutes

The Court clarified that Rules under the GST Act cannot override or limit the statutory provisions. For instance, Rule 149, which facilitates electronic notices, cannot replace the broader mandate of Section 169.

Relevant Precedents

The Court’s analysis referred to:

• Pandidorai Sethupathi Raja Vs Superintendent of Central Tax, Chennai: This case underscored the taxpayer’s responsibility to check the GST portal. However, the Madras High Court noted that this precedent didn’t consider Section 169 in its entirety.

Implications for Taxpayers and Authorities

Taxpayers:

• Regularly monitor the GST portal.
• Ensure updated contact details for registered email and postal addresses.

Tax Authorities:

• Follow all prescribed modes of service before considering portal-based publication as a fallback.
• Avoid relying solely on portal uploads to ensure compliance with Section 169.

Conclusion

This landmark judgment reinforces the principle that statutory mandates must be adhered to in tax proceedings. For taxpayers, it provides clarity on their rights and the authorities’ obligations under Section 169 of the CGST Act. By ensuring adherence to these provisions, the judgment fosters a more transparent and just compliance framework.