Madras HC Sends Engineering Firm’s Ex-Parte GST Assessment Back for Fresh Hearing, With 25% of Disputed Tax Needed to Unfreeze Account

The petitioner challenged an assessment order dated 5 July 2024.

The tax notices had been uploaded to the GST portal, but the petitioner said it was unaware of them and had not received the original show-cause notice.

The assessment was made without a personal hearing.

The petitioner offered to pay 25% of the disputed tax; the State accepted that the hearing had not been provided and agreed to remittal subject to payment.

The petitioner’s bank account had also been attached.

Section 169 of the CGST Act, 2017 recognises prescribed modes of service, including service through the GST portal.

The Court accepted portal service as sufficient, but held that where a taxpayer does not respond to notices sent through one mode, the officer should consider other modes available under Section 169—preferably registered post with acknowledgment due (RPAD)—to make service effective and avoid merely formal compliance.

The Court also relied on the requirement of a fair opportunity to be heard before an adverse assessment is made; no specific precedent was cited.

Although the show-cause notice had been uploaded to the GST portal, the petitioner claimed not to have known of it, and the assessment was confirmed without a personal hearing.

The Court considered that the officer, despite the absence of a response, should have explored other available service modes rather than relying only on portal notices.

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

The setting aside would take effect upon payment; any amount already recovered or deposited could be adjusted against that payment.

The petitioner was to file objections and supporting documents within three weeks of payment, after which the officer was to provide 14 days’ clear notice of a personal hearing and pass a fresh order on the merits.

The bank was directed to defreeze the account upon proof of payment and notify the tax authority.

The writ petition was disposed of without costs.