The Madhya Pradesh High Court has underscored the critical importance of proper service of show cause notices under the Central Goods and Services Tax Act, 2017 (CGST Act). In a recent judgment, the Court set aside GST demand orders where notices were uploaded under the 'Additional Notices' tab of the GST portal instead of the 'View Notices and Orders' tab, rendering the assessee unaware of the proceedings and violating principles of natural justice.
Background & Facts
The Dispute
The petitioner, Maple Overseas Trade Private Limited, challenged an order dated 10.03.2025 issued under Sections 73 and 107 of the CGST Act for the tax period 2022-23. The order raised a demand against the petitioner, which was upheld in appeal solely on the ground that the appeal was filed beyond the prescribed time limit. The petitioner contended that it was unaware of the show cause notice or the proceedings as the notice was uploaded under the 'Additional Notices' tab of the GST portal, which it did not regularly monitor.
Key Facts
The petitioner is a registered taxpayer under the CGST Act
A show cause notice was issued for the tax period 2022-23 but uploaded under the 'Additional Notices' tab on the GST portal
The petitioner failed to respond to the notice as it was unaware of its existence
Demand orders were passed on 14.07.2023 under Section 73 of the CGST Act
Appeals against these orders were dismissed on 02.12.2024 solely on the ground of delay
The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the demand and appeal orders
Procedural History
14.07.2023: Demand orders passed under Section 73 of the CGST Act
02.12.2024: Appeals dismissed by the Appellate Authority on limitation grounds
10.03.2025: Impugned order upheld the demand (Annexure-P/7)
24.06.2026: Present writ petition filed before the Madhya Pradesh High Court, Indore Bench
Relief Sought
The petitioner sought:
Quashing of the demand order dated 14.07.2023 and appeal order dated 02.12.2024
A direction to the respondents to re-adjudicate the show cause notice after providing an opportunity of hearing
Application of the principles laid down in the coordinate Bench judgment in Singh Construction and Co. v. State of M.P.
The Legal Issue
The central question before the Court was whether the uploading of a show cause notice under the 'Additional Notices' tab of the GST portal, instead of the 'View Notices and Orders' tab, constitutes valid service and whether the consequent demand orders violate the principles of natural justice.
Arguments Presented
For the Petitioner
The petitioner relied on the judgment of the coordinate Bench in Singh Construction and Co. v. State of M.P., where identical circumstances led to the setting aside of demand orders
It was argued that the petitioner was unaware of the show cause notice as it was uploaded under the 'Additional Notices' tab, which is not regularly monitored by taxpayers
The petitioner contended that the complex architecture of the GST portal misled it into missing the notice, thereby depriving it of an opportunity to respond
Reference was made to judgments of the Madras High Court (East Coast Constructions and Industries Ltd. v. Assistant Commissioner and Sabari Infra (P.) Ltd. v. Asstt. Commissioner) and the Delhi High Court (Umang Realtech (P.) Ltd v. Union of India and Anhad Impex v. Assistance Commissioner), where similar issues were addressed and demand orders were set aside
For the Respondent
The respondent did not dispute the petitioner's contention regarding the uploading of the notice under the wrong tab
No specific counter-arguments were presented, and the respondent effectively conceded the petitioner's case
The Court's Analysis
The Court examined the principles of natural justice, particularly the right to be heard, in the context of GST proceedings. It observed that the GST portal's design played a pivotal role in the petitioner's inability to respond to the show cause notice:
"The problem has arisen on account of the complex architecture of the web portal. It has been designed to facilitate easy access of informations. It has however resulted in the petitioner failing to notice the notice that was issued to the petitioner prior to the impugned order on 20.03.2023. It went unnoticed by the petitioner, as a result of which, the impugned orders have been passed on 29.04.2023."
The Court relied on the Madras High Court's judgments, which had previously addressed the issue of notices being uploaded under the wrong tab. In East Coast Constructions and Industries Ltd. v. Assistant Commissioner, the Madras High Court had directed the respondents to redesign the portal to ensure that both 'View Notices' and 'View Additional Notices' tabs are under one heading. The Court also noted that the Delhi High Court had followed the Madras High Court's judgments in similar cases.
The Court emphasized that the failure to serve the notice properly deprived the petitioner of an opportunity to respond, thereby violating the principles of natural justice. It held that the demand orders, passed without the petitioner's knowledge or participation, could not be sustained.
The Verdict
The Court set aside the impugned order dated 10.03.2025 and disposed of the writ petition by extending the directions issued in Singh Construction and Co. v. State of M.P. to the present case. Specifically, the Court directed:
The respondents to reopen the portal to enable the petitioner to file a response to the show cause notice (Form GST DRC-01) within two weeks
The Proper Officer to re-adjudicate the show cause notice after providing an opportunity of personal hearing
Fresh speaking orders to be passed in accordance with law within the period prescribed under Section 75(3) of the CGST Act
Clarified that the Court had not considered the merits of the parties' contentions, and all rights and contentions were reserved
What This Means For Similar Cases
Natural Justice Requires Proper Service of Notices
GST authorities must ensure that show cause notices are uploaded under the correct tab ('View Notices and Orders') on the GST portal. Uploading notices under the 'Additional Notices' tab may render the service invalid and violate principles of natural justice
Taxpayers should regularly monitor both 'View Notices and Orders' and 'Additional Notices' tabs to avoid missing critical communications. However, the onus of proper service lies with the authorities
Courts are likely to set aside demand orders where notices are not properly served, even if the taxpayer's appeal is dismissed on limitation grounds
Portal Design and Administrative Efficiency
The complex architecture of the GST portal has been recognized as a systemic issue. Tax authorities must simplify the portal to ensure that notices are easily accessible under a single heading
Judicial precedents from Madras and Delhi High Courts have established that improper service due to portal design flaws will not be condoned. Taxpayers can rely on these judgments to challenge demand orders
Opportunity of hearing is sacrosanct. Even if a taxpayer misses a notice, authorities must provide a fresh opportunity to respond before passing final orders
Strategic Takeaways for Practitioners
Challenge demand orders on procedural grounds: If a client was unaware of a show cause notice due to portal design flaws, practitioners should immediately file writ petitions citing the judgments of the Madras, Delhi, and Madhya Pradesh High Courts
Seek re-adjudication: Courts are inclined to direct re-adjudication where principles of natural justice are violated. Practitioners should argue for a fresh opportunity to respond to the show cause notice
Document portal access: In cases where notices are uploaded under the wrong tab, practitioners should gather evidence (screenshots, affidavits) to demonstrate that the client did not have actual knowledge of the proceedings
Monitor limitation periods: Even if a notice is missed, practitioners should file appeals within the prescribed time limit to avoid dismissal on technical grounds. However, courts may still intervene if the delay is attributable to portal flaws
