Allahabad HC Quashes GST Demand Over Portal Notice Glitch

The Allahabad High Court has set aside a GST demand order after finding that the assessee was effectively denied a fair opportunity to respond because statutory notices were uploaded in the wrong section of the GST portal. Instead of appearing under the familiar “View Notices and Orders” tab (where taxpayers routinely check for proceedings), the communications landed in “Additional Notices and Orders,” leaving the petitioner unaware of the case against them.

Recognizing the procedural lapse, a Division Bench of Justice Shekhar B. Saraf and Justice Praveen Kumar allowed the writ petition, quashed the demand order dated March 30, 2024, and directed the assessing officer to issue a fresh notice in accordance with law—this time providing at least 15 clear days for the taxpayer to respond and ensuring an opportunity of personal hearing.

This ruling reinforces a growing judicial trend: technical glitches or miscommunication through the GST portal cannot be used to prejudice taxpayers’ rights.

Case Snapshot

Court: Allahabad High Court
Bench: Justice Shekhar B. Saraf & Justice Praveen Kumar
Statute Involved: Section 73 of the CGST/UPGST Act (demands not involving fraud, willful misstatement, or suppression).
Impugned Action: Demand order issued by the Assistant Commissioner on March 30, 2024.
Grievance: Notices were not visible in the “View Notices and Orders” tab—the standard location where taxpayers track proceedings—causing the assessee to miss their chance to respond.
Relief Granted: Order quashed; fresh notice to be issued; minimum 15 clear days response time; opportunity of hearing mandated.

What Went Wrong on the GST Portal?

The petitioner argued that none of the show-cause related communications—leading up to the Section 73 demand—appeared in the usual “View Notices and Orders” tab within the GST account dashboard. Instead, they were tucked away under “Additional Notices and Orders.”

Why is that a problem? Because most taxpayers (and even many consultants) habitually monitor the primary notices tab for all statutory communications. If a critical show cause notice is placed elsewhere—without clear alerting mechanisms—the taxpayer may never know action is pending, resulting in ex parte demands.

In this case, that’s exactly what happened: no meaningful opportunity to reply → demand order passed → litigation.

Reliance on Precedent: Ola Fleet Technologies Pvt. Ltd. v. State of U.P.

The Bench noted that this was not an isolated technical aberration. It referenced its earlier decision in Ola Fleet Technologies Pvt. Ltd. v. State of U.P., where a similar misplacement of notices on the GST portal led to the taxpayer being deprived of a chance to contest proceedings. There too, the Court recognized that user-interface inconsistencies on the portal can translate into denial of natural justice.

By invoking Ola Fleet, the Bench signaled a consistent judicial approach: where digital service of notice is relied upon, it must be clear, accessible, and reasonably discoverable.

Court’s Reasoning

1. Procedural Fairness Comes First: Tax liability cannot be fast-tracked at the cost of natural justice. If a taxpayer never sees the notice, a demand—no matter how legally sound—will not stand.

2. Department Acknowledgment: Counsel for the State did not dispute that the notices failed to appear in the correct tab. That admission tipped credibility in the petitioner’s favor.

3. Benefit of Doubt to the Taxpayer: Given the acknowledged technical placement issue, the Court accepted the assessee’s plea that it was unaware of the proceedings.

4. Right to Respond: Under Section 73, the taxpayer must be given notice and a chance to present records, explanations, and reconciliations before a demand is confirmed.

5. Remand with Safeguards: Quashing alone is not enough. The Bench structured relief: fresh notice + 15 clear days + opportunity of hearing. This ensures the case proceeds on merits, not merely on technicalities.

What Does “15 Clear Days” Mean?

“Clear days” generally means you exclude the day the notice is served and the day the reply is due when counting the response window—unless a statute or the notice wording states otherwise. In practice:

• Day 0: Notice date / service date (not counted).

• Start counting from the next day.

• The last counted day is the day before the deadline.

Example: If notice is deemed served on 1 August, 15 clear days run 2–16 August. A reply would be due on 17 August (subject to how the notice is worded). Always confirm the department’s date computation, and reply early where possible.

Quick Ref: Section 73 of the CGST/UPGST Act

Section 73 covers tax short-paid, not paid, or input tax credit wrongly availed, without allegations of fraud or willful suppression. Key points:

• Show Cause Notice (SCN) must be issued within prescribed timelines.

• Taxpayer gets an opportunity to respond and may pay tax + interest to reduce penalty exposure.

• Proper service of notice is critical—defects in service often lead Courts to remand matters.

Lessons for Taxpayers

1. Check All Tabs in the GST Portal
Don’t rely only on “View Notices and Orders.” Regularly review “Additional Notices and Orders,” “User Services,” and “Downloads.”

2. Enable Email/SMS Alerts
Ensure registered email IDs and mobile numbers are current. Many system alerts rely on these.

3. Calendar Regular Compliance Audits
Assign a staff member or consultant to log in weekly during scrutiny or audit phases.

4. Screenshot Everything
If you suspect missing notices, capture dated screenshots of portal sections; useful evidence in litigation.

5. Respond Proactively
If you catch sight of any “Additional” or “Advisory” uploads related to assessments, write to the officer clarifying whether a formal SCN exists.

Lessons for the Department

• UI Consistency Matters: Statutory notices should default to a single, standardized location.

• Tagged Alerting: If notices appear in secondary tabs, taxpayers should get explicit alerts.

• Audit Logs: Maintain verifiable logs showing date/time posting + taxpayer view date to reduce litigation.

• Training Assessing Officers: Officers must confirm taxpayers actually received—not just that the system “uploaded”—critical communications.

FAQs

1. I missed a GST notice because it wasn’t in “View Notices.” What should I do?
Immediately download whatever is available, write to the jurisdictional officer citing the portal placement issue, and seek an opportunity to respond.

2. Does portal upload count as valid service?
Yes—if reasonably accessible and supported by system intimation. Where wrong placement deprives you of notice, Courts may grant relief.

3. What is the difference between “Additional Notices & Orders” and “View Notices & Orders”?
“View Notices” is the primary statutory tab. “Additional” often houses advisory, supplemental, or technical uploads—but some officers mistakenly post critical notices there.

4. If my order is quashed, do I escape tax liability?
No. The matter is usually remanded. You must respond on merits when the fresh notice is issued.

5. How should I count 15 clear days to reply?
Exclude the date of service and the reply due date; count the intervening days. When in doubt, reply early.

Action Checklist for Affected Taxpayers

• ✅ Log into the GST portal today and review all notice tabs.

• ✅ Update email & mobile.

• ✅ Download and archive copies of every notice/order.

• ✅ If you discover a past demand you never saw, consult a GST professional and consider representation or writ relief (depending on timelines).

Conclusion

The Allahabad High Court’s ruling sends a clear message: technology cannot become a hurdle to natural justice. When the government relies on digital service, it must ensure notices are visible, intelligible, and placed where taxpayers reasonably expect to find them. By directing issuance of a fresh notice with 15 clear days and mandating a hearing, the Court reaffirmed the balance between revenue enforcement and taxpayer rights.

For businesses, the takeaway is simple: monitor the GST portal diligently—across every tab—and act fast at the first sign of a proceeding. A few minutes of dashboard hygiene can save months of litigation.