Madras HC Remands Firm’s Ex Parte GST Case For Fresh Hearing Subject To 25% Disputed-Tax Payment, Urges Other Notice Modes When Portal Notices Go Unanswered

In brief

The question

Whether the assessment order should be set aside where the notices were uploaded to the GST portal but no personal hearing was provided before the order was passed

The court held

The writ petition was disposed of, and the assessment order dated 23 August 2024 was set aside, subject to the petitioner paying 25% of the disputed tax within four weeks of receiving the Court’s order; setting aside takes effect from payment.

It also directed

The petitioner must file its reply and supporting documents within three weeks of payment.

The respondent must then provide 14 clear days’ notice of a personal hearing and pass a fresh order on the merits and in accordance with law.

The bank account is to be de-frozen upon production of the Court’s order and proof of payment.

No costs were ordered.

01Facts

The petitioner challenged a GST assessment order dated 23 August 2024, issued in Form GST DRC-07.

pp. 1–3

The notices had been uploaded to the GST portal, but the petitioner said it was unaware of them and had not filed a reply.

pp. 1–3

The petitioner also stated that it had not received a personal hearing before the order was passed; the respondent acknowledged that no personal hearing had been provided.

pp. 1–3

The petitioner sought remand and offered to pay 25% of the disputed tax.

pp. 1–3

The High Court considered whether the ex parte order should stand and whether the matter should be remitted for fresh consideration.

pp. 3–4

02Issues

i.Whether the assessment order should be set aside where the notices were uploaded to the GST portal but no personal hearing was provided before the order was passed

pp. 2–4

ii.Whether the respondent should have explored other modes of service under Section 169(1) of the GST Act after receiving no response to portal notices

p. 4

03Law Applied

Section 169(1) of the GST Act recognises prescribed modes of service, including service through the GST portal and other modes such as registered post.

pp. 3–4

The Court held that portal service is sufficient service, but where a taxpayer does not respond to notices sent through a particular mode, the officer should consider other available modes—preferably registered post—to make service effective.

pp. 3–4

The Court also applied the requirement of a fair opportunity to be heard before an adverse order is made.

pp. 3–4

No precedent was cited.

pp. 3–4

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

Central Goods and Services Tax Act, 2017 Section 169

04Reasoning

Although the show-cause notice had been uploaded to the GST portal, the Court considered the petitioner’s asserted lack of awareness and the respondent’s admission that no personal hearing had been afforded.

pp. 3–5

It observed that, in the absence of a response to portal notices, the officer should have explored other modes of service under Section 169(1), rather than proceeding to an ex parte assessment.

pp. 3–5

In light of these circumstances and the petitioner’s offer to pay 25% of the disputed tax, the Court set aside the order and remitted the matter on conditions.

pp. 3–5