Facts of the Case

M/S Vivaan Enterprises operated a trading unit that was duly registered under GST. The registration was cancelled with effect from 14.08.2019 vide an order dated 22.10.2019, at which point no tax liability existed against the petitioner. Subsequently, proceedings were initiated against the petitioner in respect of transactions undertaken prior to 14.08.2019, after a notice was served on the GST portal and intimated to the e-mail address of the firm's accountant — an e-mail account that had been created while the accountant was still working for the firm, prior to its de-registration. An ex-parte order dated 22.07.2021 came to be passed against the petitioner, which, according to the petitioner, came to its notice only in the third week of August, 2023, well after the fact.

Issues Involved

  1. Whether service of a show cause notice at the e-mail address of a former employee, created prior to the de-registration of the firm, amounts to valid service of notice on the petitioner.
  2. Whether an ex-parte order passed without valid service of notice on a de-registered GST assessee is liable to be quashed.

Petitioner's Arguments

  • Once the firm itself stood de-registered, the authorities were obliged to serve notice upon the petitioner directly, and only after such valid service could the proceedings have progressed further.
  • Notice sent to the e-mail address of the accountant, created prior to the firm's de-registration, could not be construed as valid service of notice on the petitioner.
  • Relied on an earlier order of the same Court in Writ Tax No.809 of 2023 dated 31.07.2023, involving similar facts of defective service, where the impugned order had been quashed with liberty to the department to issue a fresh notice.

Respondent's Arguments

  • Counsel for the Department did not dispute that the factual issues raised in the present petition were similar to those already decided by the Court in Writ Tax No.809 of 2023.

Court Order/Findings

  • Finding the facts of the present case similar to those in Writ Tax No.809 of 2023, held that the petition could be disposed of on the same terms, quashing the impugned ex-parte order dated 22.07.2021.
  • Following the precedent, directed that the petitioner be permitted to approach the respondent authority to obtain a fresh notice within 15 days, and to file its reply to such fresh notice within the time stipulated by the authority, with an opportunity of personal hearing to be afforded before any fresh decision.
  • Passed no order expressing any independent opinion on the merits of the underlying tax dispute.

Important Clarification

  • Service of a GST notice on the e-mail address of an employee or accountant of a firm, created before the firm's GST registration was cancelled, does not constitute valid service on the taxpayer once the firm stands de-registered.
  • An ex-parte order passed on the strength of such defective service is liable to be quashed, with the department granted liberty to issue a fresh notice and afford the taxpayer a proper opportunity of hearing before proceeding further.

Sections Involved

  • Section 169 of the Central Goods and Services Tax Act, 2017 – prescribes the modes of service of notices, orders and other communications under the GST law.
  • Section 29 of the Central Goods and Services Tax Act, 2017 – governs cancellation of GST registration, relevant to the petitioner's de-registered status at the time of the impugned proceedings.
  • Section 73 of the Central Goods and Services Tax Act, 2017 – governs determination of tax not paid for reasons other than fraud, under which the ex-parte order appears to have been passed.

Decision – In Favour of

Decided in favour of the Assessee — the ex-parte order was quashed for defective service, with the department directed to issue a fresh notice and afford a proper hearing, following an identical earlier order of the same Court on similar facts.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Judicature at Allahabad
  • Case No.: WRIT TAX No.1023 of 2023
  • CNR: Neutral Citation No. 2023:AHC:198108-DB
  • Coram: Justice Ashwani Kumar Mishra and Justice Syed Aftab Husain Rizvi
  • Decision Date: 13-10-2023
  • Disposal Nature: Allowed; ex-parte order quashed

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