Simplified Explanation of the Judgment
The Patna High Court, in a significant ruling, has set aside a tax demand order of over ₹3.25 crores issued against a construction company under the GST regime. The court held that the company was denied a fair opportunity to respond to the tax notice, which had been improperly uploaded under an obscure category on the GST portal.
The case arose when the petitioner company, involved in construction work, was issued a demand notice under Section 73(9) of the GST Act, 2017. This notice included tax, interest, and penalty for the financial year 2017–18, totaling ₹3,25,98,914/-. However, the petitioner argued that they were unaware of the proceedings because no notice was visible under the standard “Notices and Orders” section of the GST portal. Instead, it had been uploaded under the “Additional Notices and Orders” section, which is not commonly checked by taxpayers.
The company discovered the tax order only in March 2024, several months after it had been issued on 31 October 2023. It immediately filed a revision application via email (as uploading was not allowed through the GST portal) and approached the court seeking relief from coercive recovery proceedings.
The petitioner argued that:
- All statutory returns had been filed properly.
- The period April to June 2017 was outside the GST regime and thus subject to VAT.
- The company never intended to evade tax.
- It was never served a valid notice to respond before the tax was assessed.
They relied on screenshots from the GST portal to show that no show-cause notice appeared under the standard “Notices and Orders” tab.
The court reviewed Section 169 of the CGST/BGST Act, which lays down various modes for valid service of notice. It found merit in the petitioner’s argument that mere uploading of a notice in a less visible portal section is not sufficient service. Referring to decisions of the Delhi High Court and the Allahabad High Court in similar cases, the court emphasized that proper service of notice is essential for natural justice.
The Court took a balanced approach: It did not comment on the correctness of the tax demand but found procedural violation in serving the notice. Accordingly, the demand order was set aside. The Court gave the petitioner four weeks to respond to the show-cause notice afresh, and directed the tax officer to issue a new decision within two months thereafter.
Significance or Implication of the Judgment
This judgment reinforces the right to a fair hearing in taxation matters under GST. It highlights the importance of clear communication by tax authorities and the need for transparency in digital service of notices. For businesses and individuals, the ruling offers hope that procedural lapses by authorities can be challenged effectively. For the government, it signals a need to improve digital notification mechanisms and avoid such disputes through better portal design and alert systems.
Legal Issue(s) Decided and the Court’s Decision with Reasoning
- Was the petitioner properly served the show-cause notice under the GST Act?
- No. The notice was uploaded under the “Additional Notices and Orders” section, which does not satisfy the standard expectation of service under Section 169 of the GST Act.
- Did the lack of proper service violate the principle of natural justice?
- Yes. The petitioner had no knowledge of the notice and hence no opportunity to reply.
- Should the impugned tax demand be quashed?
- Yes. The court quashed the order and allowed a fresh opportunity to respond.
- Did the petitioner delay or evade tax liability?
- Not examined. The court explicitly refrained from entering into the merits of the tax calculation or liability.
Judgments Referred by Parties (with citations)
- Anhad Impex v. Assistant Commissioner, Ward 16, Delhi High Court, 16 February 2024
- Ola Fleet Technologies Pvt. Ltd v. State of U.P. & Others, Writ Tax No. 855 of 2024, Allahabad High Court, 22 July 2024
Judgments Relied Upon or Cited by Court (with citations)
- Anhad Impex v. Assistant Commissioner, Ward 16, Delhi High Court
- Ola Fleet Technologies Pvt. Ltd v. State of U.P.
- Ms. Sudarshan Beopar Company Limited v. Union of India & Others, 2025 AHC 3854-BD
Case Title
M/s Lord Vishnu Construction Pvt. Ltd. v. Union of India & Others
Case Number
CWJC No. 5291 of 2024
Coram and Names of Judges
Hon’ble Mr. Justice Rajeev Ranjan Prasad
Hon’ble Mr. Justice Ramesh Chand Malviya
Names of Advocates and who they appeared for
- For the Petitioner: Mr. Archana Shahi, Sr. Adv; Mr. Mohit Agarwal; Mr. Vishal Kumar
- For the Union of India: Mr. Anshuman Singh, Sr. SC CGST & CX; Mr. Shivaditya Dhari Sinha, Asst. to ASG
- For the State of Bihar: Mr. Vikas Kumar, SC-11
Link to Judgment
7d29bfde-3fdd-46dd-9932-f43118a10e03.pdf
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