A taxpayer who did not receive the GST show-cause notice must be allowed to respond.

The petitioner challenged an order dated 24 July 2024, passed under Section 73(9) of the West Bengal Goods and Services Tax Act, 2017 (WBGST Act) and the Central Goods and Services Tax Act, 2017 (CGST Act).

The order referred to a show-cause notice in Form GST DRC-01 dated 25 August 2023.

The petitioner said the notice was not uploaded in the normal portal location, but under “Additional Notice and Orders,” and that it learned of the notice only after receiving a bank recovery notice.

The authorities subsequently issued a recovery notice in Form GST DRC-13 under Section 79(1)(c), marked a lien of ₹7,98,155 against the petitioner’s bank account, and recovered ₹81,117 from its electronic credit ledger.

The petitioner sought an opportunity to respond to the show-cause notice.

1. Whether the petitioner should be afforded an opportunity to reply to the show-cause notice when it had not received or become aware of the notice in time.

2. Whether the petitioner’s bank account should remain frozen while the respondent authority reconsidered the matter after receiving the petitioner’s reply.

Section 73(9) of the WBGST Act and the CGST Act provides the statutory basis for the impugned determination, while Section 79(1)(c) of the WBGST Act was invoked for recovery through Form GST DRC-13.

The Court applied the procedural principle that a taxpayer who has not been able to receive a show-cause notice and respond to it must be given an opportunity to do so; the authority must then consider the reply, afford a hearing, and pass a reasoned order in accordance with law.

The Court noted the petitioner’s case that the show-cause notice had been placed under a portal tab where it was not seen, and that the petitioner became aware of it only upon receiving the bank recovery notice.

In light of the petitioner’s inability to respond, the Court considered an opportunity to file a reply necessary, without deciding the underlying tax dispute. It directed the authority to consider the reply after providing a hearing and to issue a reasoned decision.

Because the bank accounts had already been frozen due to the recovery notice, the Court also directed that they be de-frozen to enable the petitioner to continue its business.

The bank authorities were directed to de-freeze the petitioner’s account.

No order as to costs was made.