GST: Madras High Court Quashes Ex‑Parte Section 73 Orders for Improper Service; Lifts Bank Attachment
GST: Madras High Court Quashes Ex‑Parte Section 73 Orders for Improper Service; Lifts Bank Attachment
The Bulleon Ventures has filed this current writ petition under Article 226 of the Constitution of India in the Madras High Court. The company here is challenging two orders dated 15.02.2025 and 19.02.2025, passed by the Commercial Tax Officer and the Assistant Commissioner (ST) under the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017, related to a tax assessment for the financial year 2020-2021. The petitioner is a company based in Coimbatore. The company claimed that the orders authorities had wrongly issued tax-related show-cause notices and passed an assessment order without giving the petitioner a fair chance to respond.
Further argues that the show-cause notices and other reminders related to the tax assessment were uploaded on the GST portal. However, they did not receive proper notice about these uploads and therefore failed to respond on time. Due to this failure to respond, the Commercial Tax Officer passed orders that attached the petitioner’s bank accounts, essentially freezing them until the tax dispute was resolved. The petitioner claims this was done without giving them a chance for a personal hearing, which is required under law.
Therefore, the company requested the court to quash the orders passed by the tax authorities because they were issued without a fair hearing and to lift the bank attachments placed on their accounts by the bank authorities. These attachments were made because of the disputed tax amount. The company added that they have already paid the complete disputed tax amount, which is why they seek the lifting of the bank attachments.
The tax authorities admitted that the notices were uploaded merely on the GST portal, but no personal hearing was given before issuing the final orders. However, they argue that uploading only the notices on the portal should be considered enough, and the petitioner failed to act on them. The bank authorities are simply complying with the government’s orders to freeze the petitioner’s bank accounts due to the tax issue.
The court deeply examined the entire case and agreed with the petitioner’s argument that they were not provided with a fair opportunity to present their case. The high court concluded that the notices and reminders were uploaded on the GST portal, but the petitioner was not properly informed about them. The court discovered that only uploading notices is not always enough for serving them properly. The officer should have explored other modes of communication to ensure the taxpayer was properly notified.
Since the company had already paid the disputed tax amount, the court quashed the bank attachment and ordered the bank authorities to release the company’s attachments and unfreeze the accounts immediately. The court sent the case back to the authorities, and asked them to reconsider the tax issue and provide a fair chance for the petitioner to present their side and allow the company to file their response. The petition is being awarded with three weeks to respond.
The tax authorities are directed to send a clear notice about a personal hearing, giving at least 14 days’ notice before the hearing. After hearing the petitioner, the authorities should pass appropriate orders on the merits. The bank accounts attached by the respondents were ordered to be unfrozen and the attachments removed immediately upon the petitioner presenting a copy of the court order to the banks.