SCN Sent Through WhatsApp Not Valid Service: CESTAT

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held the show cause notice (SCN) sent through the WhatsApp is not valid service. The bench of Ajay Sharma (Judicial Member) and P V Subba Rao (Technical Member) has set aside a service tax demand of ₹2.28 lakh while making significant observations on the validity of service of show cause notices through WhatsApp. The Tribunal held that WhatsApp communication is not a statutorily recognized mode of service under Section 37C of the Central Excise Act and cannot substitute the procedure specifically prescribed by law. The dispute arose from proceedings initiated against an individual engaged in intermediary services relating to the sale of advertisement space in print media. The department alleged that the assessee had received an amount of ₹18.50 lakh during financial years 2013-14 and 2014-15 and had failed to obtain service tax registration or discharge service tax liability. The proceedings originated from information received from the Income Tax Department. A show cause notice dated October 15, 2018 demanded service tax of ₹2,28,763 along with interest and penalties. The assessee argued that the services rendered fell within the negative list under Section 66D of the Finance Act, 1994 and therefore were not liable to service tax. It was also contended that the show cause notice had never been served through legally prescribed modes and had only been forwarded via WhatsApp more than a year after its issuance. The Tribunal examined Section 37C of the Central Excise Act, made applicable to service tax matters through Section 83 of the Finance Act. The provision specifically provides methods for serving notices, including registered post with acknowledgement due, speed post with proof of delivery, approved courier services, or affixation where primary modes fail. While interpreting the provision, the Bench comprising Judicial Member Ajay Sharma and Technical Member P.V. Subba Rao observed that the list of prescribed modes is exhaustive and not merely illustrative. The Tribunal stated that WhatsApp, being a private messaging platform, does not find any place within the statutory framework and cannot be treated as a legally valid method of serving notices. The Bench further noted that the department had failed to produce any material demonstrating attempts to serve the notice through registered post, speed post, courier service, or by affixation before resorting to WhatsApp communication. The record did not contain evidence of compliance with the mandatory statutory procedure. According to the Tribunal, such failure represented a fundamental defect striking at the root of the entire adjudication process. The Tribunal also examined the issue of limitation. It observed that even if WhatsApp communication dated October 19, 2019 was assumed to be valid service merely for argument's sake, a substantial portion of the demand would still fall beyond the extended limitation period. Out of the total demand of ₹2,28,763, an amount of ₹2,26,934 pertained to financial year 2013-14 and was found to be time-barred. Regarding the remaining demand of ₹1,829 for FY 2014-15, the Tribunal held that the department had relied solely upon third-party information received from the Income Tax Department without bringing any independent evidence of suppression, fraud, concealment, or deliberate tax evasion. The Bench emphasized that merely using expressions such as "fraud" or "suppression" in a show cause notice cannot replace substantive evidence. The Tribunal accepted the assessee's explanation that non-payment of service tax stemmed from a bona fide belief that the services were exempt under the negative list provisions. It observed that an incorrect legal understanding or ignorance of fiscal provisions cannot automatically be elevated to deliberate tax evasion or willful suppression. The Tribunal declined to send the matter back for fresh adjudication. It reasoned that remand would only prolong litigation because the larger portion of the demand was already barred by limitation while the balance amount failed due to lack of evidence supporting invocation of the extended limitation period. Consequently, the Tribunal set aside the impugned order and allowed the appeal with consequential relief. Case Details Case Title: Sridhar V Naidu Versus Commissioner of Customs, Central Excise & Service Tax Citation: JURISHOUR-1404-CES-2026(DEL) Case No.: Service Tax Appeal No. 54731 OF 2023 Date: 25.05.2026 Counsel For Appellant: Abhas Mishra, Advocate Counsel For Respondent: Mahboob Ur Rehman, Authorised Representative Click Here To Read Order Read More: Contractual Penalty Clause Can Be Enforced Without Separate Proof of Actual Loss; Supreme Court Modifies Arbitral Award Using Article 142 Powers

SCN Sent Through WhatsApp Not Valid Service: CESTAT

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