High Court Quashes Ex Parte GST Assessment for Portal-Only Notice; Fresh Hearing on 25% Deposit
High Court Quashes Ex Parte GST Assessment for Portal-Only Notice; Fresh Hearing on 25% Deposit
The present writ petition is being filed by a business firm named M/s New Kathirvel Mudaliar Paints and Hardwares, located in Kancheepuram, Tamil Nadu, and represented by its partner, Mr. E. Suresh, against the Assistant Commissioner (ST), Kancheepuram Assessment Circle, in the Madras High Court. The dispute is related to the Assessment Year (AY) 2020-2021.
The dispute arose when the tax department issued a Show Cause Notice (SCN) dated 22.11.2024 to the business, alleging that taxes were due or not correctly paid. However, the department only uploaded it on the GST portal and not physically, without serving a physical copy of the same to them. The petitioner was not aware of the notice and hence, could not file any reply to it. Since the petitioner failed to file a reply to the said show cause notice, the respondent has confirmed the proposals contained in the show cause notice, and the tax authorities passed the final ex parte assessment order dated 05.02.2025, confirming the tax demands in the SCN. Therefore, the business considered it a violation of principles of natural justice.
The business also said they are ready to deposit 25% of the disputed tax if the court sets aside the impugned order and remands the matter back to the Authority for fresh consideration. The tax department accepted the situation and said the government had no objection to the case being considered again, especially since the petitioner was ready to deposit 25% of the tax.
The court examined the entire case deeply and said that uploading a notice on the GST portal is a legally acceptable service under law; however, if there was no response to the online notice, the officer should have tried other methods of sending notices, such as Registered Post (RPAD), email, or even hand delivery, as permitted under Section 169 of the GST Act. The officer should not treat the procedure as just a formality and pass orders without real communication with the taxpayer. 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 Authority and Court as well.
Therefore, the court quashed the ex parte assessment order dated 05.02.2025 and remanded the case back to the tax authorities for fresh consideration. Directed the petitioner to deposit 25% of the disputed tax within 2 weeks from the date of receiving the court’s order. After depositing the amount, the petitioner should submit a detailed reply with supporting documents to the officer within another 2 weeks. The tax officer must then give the petitioner 14 days’ notice and a proper personal hearing, and then decide the matter again according to law.