Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 14.11.2026
Portal Upload Alone Not Enough: Bombay High Court Cancels GST Demand
This Short Article has been prepared & written by Advocate Madhumita Jha. The views expressed are based on her interpretation of the law. She can be reached at her mob no- +91 8726929060 and email id jhamadhumita27@gmail.com .
The Bombay High Court has set aside GST recovery proceedings of Rs.16.25 lakh against Above Ground Level Travco LLP, holding that notices and orders communicated only through the GST portal, without an effective opportunity to respond, violated principles of natural justice.
Background of the dispute
Above Ground Level Travco LLP received an invoice in March 2019 from Jet Set Go Aviation Services Ltd. for Rs.53.17 lakh, including IGST of Rs.8.11 lakh. Its accountant inadvertently reported the input tax credit (ITC) in the March 2019 GSTR-3B under CGST and SGST, rather than under IGST.
The LLP later corrected the classification in its September 2019 GSTR-3B by reflecting the ITC under IGST. The company maintained that this was a bona fide reporting error and did not result in any loss of revenue to the State.
How the GST proceedings unfolded
The State Tax Officer issued a show-cause notice on 27 May 2024 and subsequently passed an ex parte order-in-original on 29 July 2024. According to the petitioner, both were uploaded only on the GST portal and were not otherwise effectively communicated.
The LLP stated that it first became aware of the proceedings around February or March 2025, when a Nodal Officer contacted it by phone in connection with a government amnesty scheme. It then filed an appeal on 7 February 2025.
However, the appellate authority rejected the appeal on 29 December 2025 as time-barred. The department then issued a recovery notice under Section 79(1)(c) of the CGST Act on 11 February 2026, directing the LLPβs bank, Bank of Baroda, to pay Rs.16,25,258 to the government.
Courtβs findings: portal upload was not effective service in this case
A Division Bench of Justices M. S. Karnik and Sandesh D. Patil found that the petitioner had not been heard during the original proceedings. The Court concluded that the show-cause notice, order-in-original, and appellate order were issued in gross breach of natural justice.
The Court relied on earlier decisions recognizing that mere placement of notices and orders on the GST portal may not amount to effective communication where the taxpayer has not actually received a fair opportunity to reply or be heard.
It referred to T.S. Lines India Pvt. Ltd. v. State of Maharashtra, where the Court held that a taxpayer could not be faulted for failing to notice an order or notice on the portal when it had not been properly heard. The judgment also noted the Madras High Courtβs view in Axiom Gen Nxt India Private Limited that, where portal-based service is ineffective, the department should use alternative statutory service methods, including registered post acknowledgment due.
Significance of the ITC correction
The Court also took note of the LLPβs correction of the original ITC classification error. The ITC had initially been split between CGST and SGST instead of being claimed as IGST, and was later corrected under IGST.
Referring to Star Engineers (I) Pvt. Ltd. v. Union of India, the Court recognized that bona fide tax-reporting mistakes may warrant relief where there is no revenue loss. This reinforced the conclusion that the matter should not have proceeded through an ex parte demand and bank recovery mechanism without giving the taxpayer a meaningful opportunity to explain the correction.
Orders passed by the Bombay High Court
The Court allowed the writ petition and quashed:
- the recovery notice dated 11 February 2026 issued to Bank of Baroda for Rs.16,25,258;
- the show-cause notice dated 27 May 2024;
- the order-in-original dated 29 July 2024; and
- the order-in-appeal dated 29 December 2025.
Key takeaway for GST taxpayers
The ruling emphasizes that procedural fairness remains essential in GST administration. Uploading a notice or order on the portal may meet a formal method of communication in some circumstances, but it cannot replace an effective opportunity to respond when the taxpayer is not actually heard. It also supports a pragmatic approach to genuine ITC classification errors that are corrected and do not cause revenue loss.
Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.
Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.
Source: Bombay High Court
Handy Download:
Write to us at office@aadrikaalaw.com
Tel: +91-11-4999 2707
Leave a Reply