Madras HC Sets Aside Borewell Firm’s GST Orders For Fresh Hearing If It Deposits 25% Of Disputed Tax, Urges RPAD When Portal Notices Go Unanswered

In brief

The question

1. Whether the impugned assessment orders should be set aside where notices were uploaded on the GST portal but no personal hearing was provided.

The court held

The Court set aside all three assessment orders and their DRC-07 summaries, and remanded the matters for fresh consideration, conditional on payment of 25% of the disputed tax for each assessment within four weeks of receiving the order.

It also directed

The setting aside takes effect upon payment; any amount already recovered or deposited may be adjusted against the required payment.

The petitioner must file its objections and supporting documents within three weeks after payment. The respondent must then give 14 days’ clear notice fixing a personal hearing and pass fresh orders on the merits and in accordance with law.

The writ petitions were disposed of without costs.

01Facts

Sony Borewells challenged three assessment orders for 2018–19, 2019–20 and 2023–24, together with the corresponding summaries in Form GST DRC-07.

¶ 1, 3 · pp. 4–5

The petitioner said that notices and communications had been uploaded to the GST portal, of which it was unaware, and that it had not been given a personal hearing before the orders were passed.

¶ 1, 3 · pp. 4–5

The State accepted that no personal hearing had been provided and sought remand subject to the petitioner paying 25% of the disputed tax for each assessment.

¶ 5–6 · pp. 5–6

The petitioner also offered to make that payment.

¶ 4 · p. 5

02Issues

i.1. Whether the impugned assessment orders should be set aside where notices were uploaded on the GST portal but no personal hearing was provided.

¶ 3, 5, 7 · pp. 4–6

ii.2. Whether the matters should be remanded for fresh consideration subject to payment of 25% of the disputed tax.

¶ 4–5, 10 · p. 5, 7

03Law Applied

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

¶ 8–9 · pp. 6–7

The Court held that portal service is sufficient, but 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 make service effective.

¶ 8–9 · pp. 6–7

The Court also treated the absence of a personal hearing, which the State conceded, as relevant to setting aside the orders and remitting the matters.

¶ 5, 7 · pp. 5–6

Provisions in the judgment · 1

Goods and Services Tax Act, 2017 Section 169

04Reasoning

Although the notices had been uploaded on the GST portal, the Court considered that the petitioner claimed not to have known of them and had received no personal hearing before the ex parte assessments were made.

¶ 7–9 · pp. 6–7

It reasoned that where portal notices elicit no response, officers should consider other statutory modes of service rather than merely complete the formality of uploading notices; otherwise, the process risks avoidable litigation.

¶ 7–9 · pp. 6–7

Given the State’s concession and the petitioner’s undertaking to pay 25% of the disputed tax, the Court considered remand appropriate on that condition.

¶ 5, 10 · p. 5, 7