Madras HC Sets Aside Trader’s GST Assessment After Portal-Only Notice, Subject To 25% Deposit And Fresh Hearing

In brief

The question

1. Whether the impugned assessment order should be set aside where the petitioner claimed it had not received effective notice or an opportunity for personal hearing.

The court held

The Court set aside the order dated 9 June 2025, conditional on the petitioner depositing 25% of the disputed tax within four weeks of receiving the judgment, with credit for any amount already paid after the assessment order.

It also directed

The petitioner was directed to file its reply and supporting documents within two weeks after the deposit.

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

Upon proof of the deposit, the concerned bank was directed to defreeze the petitioner’s account and notify the respondent.

The writ petition was disposed of without costs.

01Facts

The petitioner challenged an assessment order dated 9 June 2025 and consequential FORM GST DRC-07 issued under Section 74 of the TNGST/CGST Act, 2017, for FY 2023–24.

p. 1

It submitted that it had not received physical copies of the show-cause notice or personal-hearing notice, and that the notices and impugned order had only been uploaded to the GST Portal.

pp. 2–3

The petitioner sought to file a reply and receive a hearing, offering to deposit 25% of the disputed tax.

pp. 2–3

The respondent did not oppose remand on that condition.

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02Issues

i.1. Whether the impugned assessment order should be set aside where the petitioner claimed it had not received effective notice or an opportunity for personal hearing.

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ii.2. Whether setting aside the order and remanding the matter should be conditioned on the petitioner depositing 25% of the disputed tax.

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03Law Applied

The Court considered the principles of natural justice, including the requirement to afford a meaningful opportunity to respond and be heard before an adverse decision is made.

pp. 3–4

It also noted that, where the statute provides alternative modes of service, the respondent should adopt an effective mode of service rather than repeatedly relying only on uploads to the common portal when no response is received.

p. 4

The impugned proceedings arose under Section 74 of the TNGST/CGST Act, 2017.

p. 1

Provisions in the judgment · 1 · Linked ones open on LawLens

Central Goods and Services Tax Act, 2017 Section 74

04Reasoning

The show-cause notice had been uploaded to the GST Portal, but the petitioner maintained that it had not been aware of it and had received no physical notice.

p. 4

As the petitioner did not respond, the Court considered that the respondent should have used an effective mode of service, given the availability of alternative statutory modes.

p. 4

In the circumstances, the order had been made without affording the petitioner a personal hearing, violating natural justice; the petitioner should therefore be allowed to present its case on the merits.

p. 4

The respondent accepted remand subject to the petitioner’s offer to deposit 25% of the disputed tax.

p. 3