GST Appeal Limitation: Rajasthan HC Rules Portal Upload Not 'Communication'| Case Note on Sahil Steels.

A recent and significant judgment of the Rajasthan High Court has made it clear when the period of limitation for filing an appeal under GST starts. The Court held that mere uploading of an order on the GSTN portal is not tantamount to effective "communication," and that the limitation period would run only from the date from which the assessee acquires actual knowledge of the order.

Background of the Case

The petition was filed by M/s Sahil Steels, who could not access their GST common portal account since their consultant had registered it in their own email ID and mobile number, and thereafter declined to give login credentials in a dispute. 

The petitioner went to the Commercial Taxes Officer to change the login credentials, but before this was addressed, an order of adverse assessment was passed and uploaded on the portal.
The petitioner came to know of this order only after their bank account had been attached by the department. They then preferred an appeal, but it was rejected by the Appellate Authority as time-barred, calculating the 90-day limitation period from the date of uploading on the portal-a date when the petitioner themselves did not have access to their account.
The High Court dealt with the case using a purposive interpretation of Section 107 of the Rajasthan GST Act, 2017. It referred to the words "communication to such person" and underscored the significance of those words in securing fairness.

Key Findings of the Court

Effective Communication is of Paramount Importance: The Court held that service or uploading meant more than simply service or uploading. It must be the transmission of information in such a manner that the recipient can act thereon. As the petitioner was denied access to the portal, uploading did not constitute effective communication.

• Right to Appeal: The Court reaffirmed that the right to appeal is a cherished statutory right. It would be unjust and against natural justice to deny this right on the grounds of portal inaccessibility.
• Circumstances Beyond Assessee's Control: The Court acknowledged that the petitioner's case was brought about by circumstances beyond their control (the conflict of the consultant and the delay of the department in modifying credentials). It was not fair to penalize the assessee for not accessing the portal.
• Commencement of Limitation: The Court held that the limitation period will not start from the date of uploading but from the date on which the assessee obtained actual or constructive notice of the order (in this case, either the date of bank attachment or the date on which credentials were updated).

Implications of the Ruling

• Portal Upload Not a Universal Principle: Uploading orders through the GSTN portal can be a valid mode of service, but it would not necessarily amount to communication in all cases.
• Protection for Taxpayers: The decision safeguards taxpayers who encounter actual difficulties in accessing the portal, either because of technical glitches, consultant issues, or other unavoidable situations.
• Shift to Effective Knowledge: There is a shift of emphasis from the upload date to the effective knowledge date, so that the taxpayers get a reasonable chance to exercise their right of appeal.

This judgment reiterates the principle that procedure cannot prevail over substantive justice. It makes sure that taxpayers are not denied their statutory right of appeal just due to a lack of effective communication.

Issue

Whether uploading of an order on the GSTN portal is "communication" within the meaning of limitation for filing an appeal under Section 107 of the CGST Act, 2017.

Applicable Law: Section 107(1), CGST Act, 2017

"Any individual who is aggrieved by any order or decision made under this Act by an adjudicating authority can appeal to the Appellate Authority as prescribed within a period of three months from the date on which such order or decision is communicated to such individual."Judgment
The High Court held that uploading on the GSTN portal is not a valid communication per se. Citing Section 169 of the CGST Act, it reaffirmed the accepted modes of service:

• Hand delivery,
• Registered/speed post,
• Email, or
• By making it available on the common portal (with due intimation/acknowledgment).

As no effective service of valid service was made in this case, the period of limitation was held to run from the date of effective communication to the assessee.

Case- Rectification of the order under GST

Analysis

The order guarantees that taxpayers are not unjustly denied their right of appeal. Equating uploading to communication could mean that appeals are denied without the taxpayer ever being aware of the order. The rationale of the Court protects natural justice and explains the difference between "uploading" and "communication."

Implication

• Uploading on the GSTN portal ≠ communication unless there is proper intimation under Section 169.
• The limitation for appeal starts only after effective communication.
• Relief for taxpayers discovering orders late because of access problems.
• Duty on the tax authorities to produce a valid service of orders.