Facts of the Case

M/s Cramster Gear Co, a sole proprietorship in Bengaluru, was issued a show cause notice in Form GST DRC-01 dated 13.03.2024 for scrutiny discrepancies, followed by an order under Section 73(9) dated 28.06.2024 and a summary order in Form DRC-07 dated 05.08.2024. The petitioner's subsequent appeal against the assessment was also rejected by the appellate authority on 14.05.2025. The petitioner's case was that, having applied for cancellation of its GST registration and the same having been cancelled, it never received the SCN — an e-mail was said to have been sent to the address on record and uploaded on the portal, but the notice sent by registered post was returned with the endorsement 'insufficient address'.

Issues Involved

  1. Whether service of a show cause notice solely by e-mail and portal upload, when the corresponding registered-post notice is returned as undelivered, amounts to effective service.
  2. Whether an assessee whose registration is cancelled can be expected to routinely check the GST portal for notices.
  3. Whether the resultant assessment order, summary order and appellate order should be quashed for defective service, with liberty to reply to the original show cause notice.

Petitioner's Arguments

  • The petitioner submitted that after seeking cancellation of its GST registration, it could not reasonably be expected to keep visiting the portal to check for pending notices.
  • It was pointed out that a Form GST REG-16 application had been filed giving an updated e-mail address for future correspondence, yet the SCN was never effectively served on that address.
  • The registered-post notice, being the more reliable and traditional mode, was returned undelivered with the endorsement 'insufficient address', demonstrating that service was never actually completed.

Respondent's Arguments

  • The learned AGA submitted that the show cause notice had been sent by e-mail to the address available with the Department and was also uploaded on the portal, despite which the petitioner did not appear.
  • It was conceded, however, that the notice sent by registered post had come back with the endorsement 'insufficient address'.

Court Order / Findings

  • The Court held that once a GST registration has been cancelled, it cannot be expected of the assessee to keep visiting the portal to check whether any notice has been issued, particularly where the registered-post notice — the traditional fallback mode — had itself failed for want of a correct address.
  • Finding that service of notice on the petitioner had not been completed in law, the Court quashed the order dated 28.06.2024 under Section 73(9), the summary order in Form DRC-07 dated 05.08.2024, and the appellate order dated 14.05.2025 rejecting the petitioner's appeal, allowing the writ petition partly.
  • The petitioner was permitted to reply to the original show cause notice dated 13.03.2024 within 15 days, by 4th August 2025, with the Department directed to proceed afresh from that stage.

Important Clarification

  • Where a registered-post notice is returned as undelivered for an incorrect address, mere parallel e-mail and portal upload will not cure the defect, especially when the taxpayer's registration itself stands cancelled and portal monitoring cannot reasonably be expected.
  • Assessees who update their contact details through Form GST REG-16 are entitled to expect that future communication reaches them at the address so furnished.
  • Quashing for defective service restores the proceedings to the show cause notice stage, giving the assessee a genuine opportunity to reply rather than closing the matter altogether.

Sections Involved

  • Section 73(9) of the CGST/KGST Act, 2017 – the provision under which the assessment order confirming the demand was passed.
  • Section 169 of the CGST/KGST Act, 2017 – governs the modes of service of notices and orders, central to the dispute over defective service.
  • Form GST REG-16 – the application for cancellation of GST registration, through which updated correspondence details were furnished.

Decision – In Favour of

In favour of the assessee — the assessment, summary and appellate orders were quashed for defective service, with the matter remitted to the show cause notice stage.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: WP No. 20787 of 2025 (T-RES)
Coram: Hon'ble Mr. Justice Suraj Govindaraj
Date of Order: 16.07.2025

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.