Madras HC Sets Aside Paper Trader’s Ex Parte GST Order For Fresh Hearing, If It Pays 25% Of Disputed Tax Minus ₹90,000 Recovered

In brief

The question

1. Whether the ex parte assessment order should be set aside where notices were uploaded to the GST portal but no personal hearing was afforded to the petitioner.

The court held

The Court set aside the order dated 22 February 2025 and remanded the matter for fresh consideration, conditional on the petitioner paying 25% of the disputed tax, less the amount already recovered, within four weeks of receiving the order.

It also directed

The setting aside takes effect only from the date of payment. The petitioner must file its reply and supporting documents within three weeks of payment; thereafter, the respondent must provide 14 clear days’ notice fixing a personal hearing and decide the matter on its merits and in accordance with law.

The writ petition was disposed of with no order as to costs; one miscellaneous petition was ordered and the other closed.

01Facts

The petitioner challenged an ex parte order in Form GST DRC-07 dated 22 February 2025.

The notices had been uploaded to the GST portal, but the petitioner said it was unaware of them and had not received the show-cause notice in its original form. The respondent admitted that no personal hearing had been provided before the order was passed.

¶ 3, 5, 7

The petitioner also stated that ₹90,000 had already been deducted from its Electronic Cash Ledger (ECL) and offered to pay 25% of the disputed tax, after deducting that recovery, in order to have the matter reconsidered.

¶ 4, 10

The petition additionally sought relief against recovery proceedings initiated through Form GST DRC-13 dated 16 September 2026.

p. 1

02Issues

i.1. Whether the ex parte assessment order should be set aside where notices were uploaded to the GST portal but no personal hearing was afforded to the petitioner.

¶ 3, 5, 7

ii.2. Whether the respondent should be directed, when portal notices receive no response, to consider other modes of service available under Section 169 of the GST Act.

¶ 8–9

iii.3. Whether remand for fresh consideration should be conditioned on the petitioner paying 25% of the disputed tax, net of the amount already recovered.

¶ 10

03Law Applied

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

¶ 8–9

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

¶ 8–9

The Court also applied the principles of natural justice, requiring a meaningful opportunity to be heard before an adverse assessment order is confirmed.

¶ 5, 7, 10

Provisions in the judgment · 1

Goods and Services Tax Act Section 169

04Reasoning

Although the show-cause notice had been uploaded to the GST portal, the petitioner claimed it was unaware of the notice, and the respondent conceded that no personal hearing had been given.

¶ 5, 7

The Court considered that, in the absence of any response to portal notices, the officer should have considered alternative statutory modes of service rather than proceeding to an ex parte order after merely completing formalities.

¶ 5–9

In light of the service concerns, the denial of a hearing, and the petitioner’s offer to make a part payment, the Court found it appropriate to set aside the order and remit the matter subject to payment.

¶ 10