GST Firm Partner’s Frozen Account Can Be Unfrozen After 25% Deposit As Madras HC Remands Ex Parte Tax Order, Urges Other Service Modes After Portal Silence

In brief

The question

Whether the assessment order should be set aside and the matter remitted where the notices were uploaded to the GST portal, the petitioner did not respond, and no personal hearing was afforded.

The court held

The Court set aside the assessment order and remitted the matter to the first respondent, conditional on payment of 25% of the disputed tax, less any amount already paid, within four weeks.

It also directed

The order’s setting aside would take effect upon payment.

On proof of payment and production of the Court’s order, the bank was directed to de-freeze the account.

The petitioner was to file its reply within three weeks of payment, after which the respondent was to provide 14 days’ clear notice, afford a personal hearing, and decide the matter on its merits in accordance with law.

The writ petition was disposed of with no costs.

01Facts

The petitioner challenged an assessment order issued in Form GST DRC-07 on 26 November 2025.

p. 2

It contended that notices had been uploaded under the “Additional Notices” tab of the GST portal and that it had not become aware of them; the assessment was made without a personal hearing.

p. 2

The respondents acknowledged that no personal hearing had been provided.

p. 2

The petitioner offered to pay 25% of the disputed tax and sought both remittal and the de-freezing of its partner’s bank account.

pp. 2–3

The Court also noted that the show-cause notice had been uploaded to the portal and that the petitioner said it had not received the original notice.

p. 4

02Issues

i.Whether the assessment order should be set aside and the matter remitted where the notices were uploaded to the GST portal, the petitioner did not respond, and no personal hearing was afforded.

pp. 3–5

ii.Whether de-freezing of the bank account should be directed subject to the petitioner paying 25% of the disputed tax.

p. 3, 5

03Law Applied

Section 169(1) of the GST Act provides for valid modes of service of notices and orders.

pp. 4–5

Although uploading a notice to the GST portal is a sufficient mode of service, where a taxpayer does not respond to notices sent through one mode, the officer should consider other available modes under Section 169(1)—preferably registered post with acknowledgment due (RPAD)—to ensure effective service.

pp. 4–5

The Court also proceeded on the requirement that the petitioner be given an opportunity to respond and a personal hearing before a fresh decision; it imposed payment of 25% of the disputed tax as a condition for remittal.

pp. 5–6

Provisions in the judgment · 1 · Linked ones open on LawLens

Central Goods and Services Tax Act, 2017 Section 169

04Reasoning

The Court accepted that portal upload was legally sufficient service, but considered that the absence of any response should have prompted the officer to explore other statutory service methods rather than proceed ex parte.

pp. 4–5

Because no personal hearing was afforded, the assessment was made without an effective opportunity for the petitioner to present its case.

pp. 4–5

In light of the petitioner’s undertaking to pay 25% of the disputed tax, the Court found remittal appropriate, subject to that payment.

pp. 4–5

05Holding

The Court set aside the assessment order and remitted the matter to the first respondent, conditional on payment of 25% of the disputed tax, less any amount already paid, within four weeks.

pp. 5–6

The order’s setting aside would take effect upon payment.

pp. 5–6

On proof of payment and production of the Court’s order, the bank was directed to de-freeze the account.

pp. 5–6

The writ petition was disposed of with no costs.

p. 6

LawLens.Madras High Court

Original Court PDF