GST Contractor’s Partner Gets Bank Account Unfrozen As Madras HC Reopens Assessment On 25% Deposit After Portal-Only Notices

In brief

The question

Whether the assessment order should be set aside and the matter remitted where notices were uploaded to the GST portal, but no personal hearing was provided.

The court held

The Court set aside the order dated 4 March 2025 and remitted the matter for fresh consideration, conditional on payment of 25% of the disputed tax within four weeks of receipt of the order; the setting aside would take effect upon payment.

It also directed

The petitioner was directed to file its reply and documents within three weeks after payment. The respondent must then provide 14 days’ clear notice fixing a personal hearing and pass a fresh order on the merits and in accordance with law.

The concerned bank was directed to de-freeze the account immediately upon production of the Court’s order.

The writ petition was disposed of without costs.

01Facts

The petitioner challenged the first respondent’s GST order dated 4 March 2025, issued in Form GST DRC-07.

p. 2

It said the notices had been uploaded under “View Additional Notices and Orders” on the GST portal, and that it had not become aware of them or received a personal hearing before the order was passed.

pp. 2–3

The respondents accepted that no personal hearing had been afforded and agreed to remittal subject to the petitioner paying 25% of the disputed tax.

p. 3

The petitioner also sought de-freezing of a partner’s bank account.

p. 1

02Issues

i.Whether the assessment order should be set aside and the matter remitted where notices were uploaded to the GST portal, but no personal hearing was provided.

pp. 2–4

ii.Whether the bank attachment should continue after the assessment order was set aside.

p. 5

03Law Applied

Section 169(1) of the GST Act recognises the prescribed modes of service, including service through the GST portal and by registered post with acknowledgment due (RPAD).

p. 4

The Court held that, where a taxpayer does not respond to portal notices, the officer should consider using another prescribed mode—preferably RPAD—to make service effective; merely completing formalities before passing an ex parte order may not achieve that purpose.

pp. 4–5

The Court also treated the absence of a personal hearing as a procedural deficiency warranting reconsideration.

pp. 3–5

Provisions in the judgment · 1

Goods and Services Tax Act Section 169

04Reasoning

Although portal service is a valid mode, the petitioner’s lack of response to the notices called for the officer to consider another available mode of service rather than proceed without ensuring effective notice.

pp. 3–5

The respondents acknowledged that no personal hearing had been provided, and the petitioner undertook to pay 25% of the disputed tax. In those circumstances, the Court considered remittal appropriate, subject to that payment.

p. 3, 5

Because the assessment order was being set aside, the Court held that the related bank attachment could not continue.

p. 5