Madras HC Remands Trader’s GST Case On 30% Disputed-Tax Payment, Says Officials Should Try Other Notice Modes When Portal Notices Go Unanswered

In brief

The question

Whether the assessment order should be set aside and the matter remanded where notices were uploaded to the GST portal, the petitioner said it was unaware of them, and no personal hearing was provided.

The court held

The Court set aside the assessment order and consequential DRC-07, subject to the petitioner paying 30% of the disputed tax within four weeks of receiving the order; the setting aside takes effect from the date of payment, and any amount already recovered or deposited may be adjusted.

It also directed

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

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

The writ petition was disposed of without costs.

01Facts

The petitioner challenged an assessment order under Section 74 of the TNGST/CGST Act, 2017, and consequential Form GST DRC-07, both dated 10 October 2023.

pp. 2–3 · ¶ 3–5

The petitioner said that notices had been uploaded under the “View Additional Notices and Orders” tab of the GST portal and that it had not become aware of them; the respondent accepted that no personal hearing had been given before the order was passed.

pp. 2–3 · ¶ 3–5

The petitioner offered to pay 30% of the disputed tax in return for an opportunity to present its case.

p. 3 · ¶ 4

02Issues

i.Whether the assessment order should be set aside and the matter remanded where notices were uploaded to the GST portal, the petitioner said it was unaware of them, and no personal hearing was provided.

pp. 4–5 · ¶ 7–10

ii.Whether remand should be conditional on payment of part of the disputed tax.

p. 5 · ¶ 10

03Law Applied

Section 169(1) of the GST Act recognises prescribed modes of service, including service through the GST portal.

pp. 4–5 · ¶ 8–9

The Court held that portal upload is a sufficient mode of service, but where a taxpayer does not respond to notices sent by that mode, the officer should consider other available modes under Section 169(1), preferably registered post with acknowledgement due (RPAD), to make service effective.

pp. 4–5 · ¶ 8–9

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

pp. 4–5 · ¶ 7, 10

No precedent was cited.

Provisions in the judgment · 2

TNGST/CGST Act, 2017 Section 74Section 169

04Reasoning

Although the show-cause notice had been uploaded to the GST portal, the petitioner claimed it had not become aware of it, and the respondent admitted that no personal hearing was provided.

pp. 4–5 · ¶ 7–10

The Court considered that, when portal notices receive no response, the officer should explore other statutory modes of service rather than proceed through what may amount to an ineffective formality.

pp. 4–5 · ¶ 7–10

In view of these circumstances and the petitioner’s offer to pay 30% of the disputed tax, the Court found it appropriate to set aside the order and remit the matter for fresh consideration on conditions.

pp. 4–5 · ¶ 7–10