Mobile Retailer To Get Fresh GST Hearing After Portal-Only Notices If It Pays 25% Of Disputed Tax: Madras HC

In brief

The question

Whether the assessment order should be set aside and the matter remitted where the notices were uploaded to the GST portal, the petitioner claimed not to have received effective notice, and no personal hearing was provided.

The court held

The Court set aside the assessment order and consequential Form DRC-07 dated 23 January 2025 and remanded the matter for fresh consideration, conditional on the petitioner paying 25% of the disputed tax within four weeks of receiving the order.

It also directed

Any amount already recovered or deposited may be adjusted against that payment.

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

The setting aside takes effect from the date of payment.

The petition was disposed of without costs.

01Facts

The petitioner challenged the assessment order and consequential Form DRC-07, both dated 23 January 2025, for the 2017–2018 financial year.

pp. 2–3 · ¶ 3–5

The petitioner said notices had been uploaded to the GST portal’s “View Additional Notices and Orders” section and that it had not become aware of them; it also complained that no personal hearing was provided.

pp. 2–3 · ¶ 3–5

The respondent acknowledged that no personal hearing had been given and agreed to a remand subject to payment of 25% of the disputed tax. The petitioner consented to that condition.

pp. 2–3 · ¶ 3–5

02Issues

i.Whether the assessment order should be set aside and the matter remitted where the notices were uploaded to the GST portal, the petitioner claimed not to have received effective notice, and no personal hearing was provided.

pp. 4–5 · ¶ 7–9

ii.Whether remand should be conditioned on the petitioner paying 25% of the disputed tax.

p. 5 · ¶ 10

03Law Applied

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

pp. 4–5 · ¶ 8–9

The Court observed that portal service is sufficient, but where a taxpayer does not respond to notices uploaded through one mode, the officer should consider other modes available under Section 169(1), preferably registered post with acknowledgment due (RPAD), to ensure effective service.

pp. 4–5 · ¶ 8–9

The Court also proceeded on the requirement that the taxpayer be afforded a personal hearing before an adverse order is made, as reflected in the respondent’s admission that no hearing had been provided.

p. 3 · ¶ 5

No judicial precedents were cited.

Provisions in the judgment · 2

Goods and Services Tax Act Section 74Section 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 Court considered that the authority should have explored another prescribed service mode after receiving no response.

pp. 4–5 · ¶ 7–10

The Court also noted that the assessment was made without a personal hearing, a fact admitted by the respondent.

pp. 4–5 · ¶ 7–10

In those circumstances, and given the petitioner’s willingness to pay 25% of the disputed tax, the Court found remand appropriate on that condition.

pp. 4–5 · ¶ 7–10