GST: Madras HC Quashes Ex Parte Assessment for Notice Issued Only on GSTN Portal
GST: Madras HC Quashes Ex Parte Assessment for Notice Issued Only on GSTN Portal
The current writ petition is being filed by an individual named Mr. Siddharth Mundra under Article 226 of the Constitution of India in the Madras High Court, requesting the high court to review and quash an order dated February 22, 2025, passed by the Assistant Commissioner (ST) under section 73 of the CGST Act, 2017. The petitioner claimed that the notices were issued against the principles of natural justice. The order was related to the financial year 2020-21.
The dispute arose when the Assistant Commissioner (ST) issued a Show Cause Notice (SCN) dated 26.11.2024 to Siddharth Mundra (petitioner). Petitioner argued that the notice was merely uploaded on the GST portal, and no physical copy of the same was served. Hence, they were not aware of the notice and could not file a reply to it. Since no reply was submitted to the SCN, the assistant commissioner considered the proposals mentioned in the SCN and passed a final order. Hence, the petitioner says it is a violation of principles of natural justice and should be quashed.
The petitioner further added that they are ready to deposit 25% of the disputed tax. Considering this point, the Assistant Commissioner (ST) (respondent) said that if the petitioner is suo moto ready to submit the 25% disputed tax amount, his appeal can be considered.
The Court deeply examined the case and agreed with the point of the petitioner that the SCN was merely uploaded on the GST portal, and they were not aware of it, hence could not file any reply to it. The court agreed; no doubt sending notice by uploading in the portal is a sufficient service, but the officer who was repeatedly sending reminders via the same means should have applied his/her mind and could have tried any other way or mode to inform (modes prescribed in Section 169 of the GST Act. Simply passing an ex parte order just by following basic formalities is not helpful. It will only lead to more legal cases, wasting the time of not just the tax officer but also the appellate authorities and the court.
Therefore, if a taxpayer does not respond to a notice sent in one way, the officer must seriously try to send the notice using another method listed under Section 169(1) of the GST Act, preferably by Registered Post with Acknowledgement Due (RPAD). This will help in properly achieving the purpose of the GST law. As the court finds a lack of opportunity given to the petitioner, it quashes the order dated February 22, 2025. Send the matter back to the Assistant Commissioner (ST) for fresh consideration. Ordered the petitioner to deposit 25% of the disputed tax that they voluntarily agreed to pay within the period of two weeks from the date of receipt of a copy of this order. Thereafter, the petitioner is directed to file a reply along with supportive documents within a period of two weeks. Thereupon, the Assistant Commissioner (ST) is instructed to review the reply and must give the petitioner a clear 14-day notice, offering a chance for a personal hearing, and then make a decision according to the law.