Madras HC Sets Aside Trader’s Ex-Parte GST Demand After No Personal Hearing, With Fresh Hearing Conditional On 25% Disputed-Tax Deposit

In brief

The question

1. Whether, in the circumstances, portal-only service of notices—despite the petitioner’s non-response—was sufficient to proceed ex parte without exploring other modes of service under Section 169(1) of the GST Act

The court held

The Court allowed the petition by setting aside the orders dated 23 and 25 December 2025 and remanding the matter to the respondent.

It also directed

The petitioner was directed to pay 25% of the disputed tax within four weeks of receiving the order; setting aside would take effect upon payment, with any amount already recovered or deposited available for adjustment. The petitioner must file objections and supporting documents within three weeks after payment. The respondent must then provide 14 clear days’ notice fixing a personal hearing and pass fresh orders on the merits and in accordance with law

01Facts

The petitioner challenged an ex parte GST order confirming a demand under Section 74 of the CGST/TNGST Acts, together with interest and penalty.

p. 2 · ¶ 3

He submitted that the notices had been uploaded on the GST portal and that he had not become aware of them; he also complained that no personal hearing was given. The respondent acknowledged that no personal hearing had been provided and agreed to remand subject to payment of 25% of the disputed tax. The petitioner offered to make that payment

pp. 2–3 · ¶ 3–5

02Issues

i.1. Whether, in the circumstances, portal-only service of notices—despite the petitioner’s non-response—was sufficient to proceed ex parte without exploring other modes of service under Section 169(1) of the GST Act

p. 4 · ¶ 7–9

ii.2. Whether the impugned orders should be set aside and the matter remanded where no personal hearing had been provided and the petitioner offered to pay 25% of the disputed tax

p. 3, 5 · ¶ 4–5, 10

03Law Applied

Section 169(1) of the GST Act provides for legally recognised modes of service; the Court stated that where a taxpayer does not respond to notices sent through one mode, the officer should explore other available modes, preferably registered post with acknowledgment due, to make service effective rather than merely formal

p. 4 · ¶ 8–9

The Court also treated the absence of a personal hearing before an adverse ex parte order as a procedural deficiency warranting reconsideration

pp. 3–5 · ¶ 5, 7, 10

Sections 74 and 50 were identified as the provisions under which the disputed demand and consequential interest were raised, but the Court did not interpret their substantive requirements

p. 1 · p. 2 · ¶ 1

Provisions in the judgment · 2 · Linked ones open on LawLens

Central Goods and Services Tax Act, 2017 Section 74 Section 50

04Reasoning

Although the Court accepted that portal service is a sufficient mode of service, it considered that the petitioner’s failure to respond should have prompted the officer to consider other modes authorised by Section 169(1), rather than proceed on the basis of formal portal uploads alone

p. 4 · ¶ 8–9

The respondent also admitted that no personal hearing had been given, and the petitioner was willing to pay 25% of the disputed tax. In those circumstances, the Court found it appropriate to set aside the orders and permit fresh consideration, subject to payment and filing of objections

p. 3, 5 · ¶ 5, 7, 10