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Gold Wood Enterprises Vs. The Assistant Commissioner

Case Title

 Gold Wood Enterprises Vs. The Assistant Commissioner

Court

Kerala High Court

Honourable judges

Justice A.K.Jayasankaran Nambiar

Citation

2020 (08) GSTPanacea 135 HC Kerala

WP(C).No.13647 OF 2020(E)

Judgemant date

20th August 2020

The petitioner has approached this Court to challenge a series of demand cum recovery notices, referred to as Ext.P2, issued to him under the GST Act. These demand notices were issued following assessment orders dated 25.11.2019 and 27.11.2019 for the assessment periods from April 2018 to May 2019. The petitioner’s primary contention is that these assessment orders were not properly served on him. However, upon receiving the demand notices, the petitioner took immediate action by filing returns for the specified periods within thirty days from the date of receipt of these demand notices, in an effort to benefit from the provisions under Section 62 of the GST Act that allow for the withdrawal of assessment orders if returns are filed within the stipulated time.

The respondents, in their statement, assert that the assessment orders were uploaded to the department’s web portal on the same dates they were issued, namely 25.11.2019 and 27.11.2019. According to Section 62 of the GST Act, an assessee has the option to file returns for the relevant period within 30 days from the date of receipt of the orders, which were passed on a best judgment basis by the assessing authority, to get those orders withdrawn. In this case, although the orders were uploaded on the department’s web portal on the specified dates, the petitioner did not file his returns within 30 days from these dates.

Instead, the petitioner filed the returns within 30 days from the date of receipt of the demand notices that followed the assessment orders. This action was taken by the petitioner to comply with the procedural requirements and to avail the benefit of having the assessment orders withdrawn. However, the core issue remains whether the initial service of the assessment orders through the web portal constitutes proper service under the GST Act, especially since the petitioner claims not to have received them until the demand notices were issued. This raises questions about the effectiveness and fairness of the communication process used by the tax authorities and whether it aligns with the legislative intent of providing a reasonable opportunity for compliance to taxpayers.

The Court’s consideration of this matter will need to address these procedural aspects, ensuring that the principles of natural justice are upheld while also maintaining the integrity of the tax collection process. The resolution of this case could have significant implications for how tax authorities manage the service of assessment orders and the subsequent steps taxpayers must take to comply with GST regulations.

Upon consideration of the facts and circumstances of the case and the submissions made across the bar, it is noted that under Section 169(c) and (d) of the GST Act, the service of any communication to the e-mail address provided by an assessee at the time of registration, as well as by making the communication available on the common portal of the department, is to be treated as effective communication under the statute. Consequently, the petitioner cannot dismiss the fact that the assessment orders were effectively brought to his notice on 25.11.2019 and 27.11.2019, respectively. Given that the returns filed by the petitioner for the period covered by the assessment orders were submitted belatedly—more than 30 days after the date of service of the orders on the petitioner via the department’s web portal—he is not eligible for the benefit of withdrawal of the assessment orders as mandated under Section 62 of the GST Act. The Writ Petition challenging the assessment orders and demand notices therefore fails and is accordingly dismissed.

However, acknowledging the submission of the learned counsel for the petitioner that he would require some time to file appeals against the assessment orders, it is directed that the recovery proceedings for the amounts confirmed against the petitioner by the impugned assessment orders and demand notices shall be stayed for a period of six weeks. This stay is to provide the petitioner an opportunity to move the appellate authority through statutory appeals in the interim.

In this context, it is important to note that the petitioner, upon receiving the demand notices, did take necessary steps to file returns for the relevant period within thirty days from the date of receipt of the demand notices, with the intention of getting the benefit of withdrawal of the assessment orders as contemplated under Section 62 of the GST Act. However, as the assessment orders were already uploaded on the web portal on the dates they were passed, and the petitioner did not file the returns within the stipulated thirty days from these dates, the statutory benefit could not be availed.

The court’s decision underscores the importance of timely compliance with statutory requirements and the consequences of delays in meeting these deadlines. Nonetheless, the court has also shown a degree of flexibility by allowing the petitioner a grace period to seek redress through the appellate mechanism, thereby balancing strict adherence to procedural rules with the need to ensure fair opportunity for the petitioner to exercise his legal rights. This approach reflects a nuanced understanding of the interplay between regulatory compliance and the practical realities faced by taxpayers, aiming to uphold the principles of justice and equity within the framework of the GST Act.

Overall, the court’s ruling not only affirms the validity of the assessment orders and demand notices issued under the GST Act but also highlights the procedural safeguards available to taxpayers, ensuring that while compliance is enforced, avenues for redress and appeal are kept open, maintaining a fair and balanced tax administration system.

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