The Kerala High Court has provided significant clarification on the distinction between non-service of notice and lack of knowledge of service of notice, emphasizing the implications for the principles of natural justice. Justice Bechu Kurian Thomas delivered this observation in the case titled M/s Ramanattu Motor Corp. v. State of Kerala (WP(C) No. 23872 of 2024), which involved a dispute under Section 73(1) of the GST Act.
Background of the Case
The petitioner, M/s Ramanattu Motor Corp., challenged an order issued under Section 73(1) of the GST Act, claiming that neither the show-cause notice nor the order of determination was properly served. The petitioner argued that it became aware of the proceedings only after recovery intimation was uploaded on the GST portal. The notices were allegedly uploaded in the tab labeled “Additional Notices and Orders,” rather than the designated tab for “Notices and Orders.” This caused confusion, as the petitioner had no reason to check the former tab in the absence of prior notification.
The petitioner contended that this procedural lapse constituted a violation of natural justice since it was deprived of an opportunity to contest the matter effectively.
Arguments Presented
- Petitioner’s Argument: The petitioner claimed that it was unaware of the notices due to their improper placement on the GST portal. It argued that this procedural ambiguity amounted to a failure in serving notice, thereby violating natural justice principles.
- Department’s Argument: The department countered that any failure by taxpayers to navigate through the portal effectively cannot be used as grounds to challenge its proceedings. It maintained that there was no violation of natural justice in this case.
Court’s Observations
Justice Bechu Kurian Thomas highlighted a critical distinction between non-service of notice and lack of knowledge or not noticing service.
- Non-Service of Notice: This constitutes a clear violation of natural justice principles because no information reaches the concerned party.
- Lack of Knowledge or Not Noticing Service: This does not automatically amount to a violation unless it arises due to deficiencies attributable to the sender, such as vague or ineffective dissemination methods.
The court noted that uploading notices under “Additional Notices and Orders” without clear instructions or prior alerts made it unreasonable to assume effective communication with taxpayers. This procedural vagueness undermined proper service and denied the petitioner sufficient opportunity to respond.
Judgment
The bench concluded that neither proper service nor adequate opportunity was afforded to the petitioner due to systemic ambiguities in disseminating notices. Consequently, it set aside the impugned order under Section 73(1) of the GST Act, allowing the petition.
Key Takeaways
- Principles of Natural Justice: The judgment underscores that procedural lapses in serving notices can invalidate proceedings if they deprive parties of an opportunity to defend themselves.
- Systemic Transparency: Effective dissemination methods are crucial for ensuring taxpayers are informed about notices and orders uploaded on portals.
- Legal Implications: The distinction between non-service and lack of knowledge is pivotal in determining whether principles of natural justice have been violated.
Case Details
- Case Title: M/s Ramanattu Motor Corp. v. State of Kerala
- Case Number: WP(C) No. 23872 OF 2024
- Citation: 2025 LiveLaw (Ker) 145
- Counsel for Petitioner: G. Mini and A. Kumar
This judgment serves as a reminder for authorities to adopt clear and effective communication practices when issuing notices, ensuring compliance with procedural fairness and natural justice principles.
This judgment serves as a reminder for authorities to adopt clear and effective communication practices when issuing notices, ensuring compliance with procedural fairness and natural justice principles.
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