Facts of the Case

  • The petitioner, Tvl. Bagavathiamman Magalir Sangam, is an entity carrying out operations in Dindigul, Tamil Nadu.
  • The Revenue Department conducted an examination of the information furnished in returns and alleged that the petitioner was conducting business as an un-registered person despite being statutorily liable to be registered under the GST Act.
  • Consequently, the respondent (The State Tax Officer, Vedasandur Assessment Circle) initiated adjudication proceedings and issued a Show Cause Notice (SCN) in Form GST DRC-01 along with an ASMT notice.
  • The entire set of notices and communications was uploaded exclusively to the online GST portal dashboard. No physical copies or alternative modes of communication were served upon the dealer.
  • Because the petitioner was completely unaware of the uploaded digital notices, they could not file a reply or participate in the personal hearing.
  • As a result, the respondent passed an ex-parte assessment order under Reference No. ZD331225380996Z dated 24.12.2025 for the Assessment Year 2020-2021, creating a tax liability along with interest and applicable penalties.
  • Aggrieved by this ex-parte order, the petitioner approached the Madurai Bench of the Madras High Court via a Writ Petition seeking a Writ of Certiorari to quash the assessment order.

Issues Involved

  1. Whether the digital hosting of notices solely on the GST portal's "View Additional Notices" tab without any other mode of intimation fulfills the criteria of proper service of notice and satisfies the Principles of Natural Justice.
  2. Whether an ex-parte assessment order passed due to the non-cognizance of portal notices by the assessee or their consultant warrants judicial intervention and remand under Article 226 of the Constitution.
  3. What conditional thresholds/equitable terms should be levied on the assessee to restore the matter back to the file of the Assessing Officer for a fresh de novo adjudication.

Petitioner’s Arguments

  • The petitioner contended that they were completely oblivious to the initiation of proceedings as the respondent department uploaded all notices exclusively to the online portal and never served them through any other physical or direct digital modes.
  • It was submitted that typical rural dealers face immense practical difficulties in accessing the portal frequently. Furthermore, the auditors and tax practitioners who deal with the GST portals occasionally fail to check the specific sub-tabs or omit to inform the dealers in a timely manner.
  • The petitioner also pointed out that technical issues on the GST portal often hinder taxpayers from seamlessly uploading replies or viewing notices, creating major communication blockades.
  • Therefore, the impugned ex-parte order was passed without considering the merits of the case and constitutes a direct violation of the right to a fair hearing.

Respondent’s Arguments

  • The respondent revenue authority supported the validity of the impugned order, arguing that the department had strictly complied with the statutory procedures by uploading the DRC-01 notice and ASMT notices onto the official GST portal.
  • It was argued that the law mandates taxpayers to regularly monitor their registered GST portal accounts.
  • Since the petitioner failed to utilize multiple opportunities extended during the assessment cycle and did not submit any response or evidence, the Assessing Officer was fully justified in passing an ex-parte order based on the information available on record.

Court Order / Findings

  • The Single Bench of Hon’ble Justice D. Bharatha Chakravarthy observed that the assessment was undeniably made ex-parte because the petitioner failed to utilize the opportunities provided on the portal.
  • Taking into account the specific nature of the discrepancies, the explanation provided by the assessee regarding the communication gaps, and the technical/procedural constraints highlighted before the Court, the Bench deemed it appropriate to grant the assessee one final opportunity to present their submissions and produce their books of accounts.
  • The Court noted that it has consistently extended such opportunities on equitable grounds, but the interest of the revenue must also be secured by imposing appropriate conditions.
  • Accordingly, the High Court allowed the Writ Petition on the following conditional terms:
    1. The petitioner is directed to deposit 25% of the disputed tax amount with the respondent within four weeks of receiving the web copy of the order, without waiting for a certified copy.
    2. Upon verification of such deposit, the impugned assessment order dated 24.12.2025 shall stand set aside, and the matter shall stand remanded back to the file of the respondent for fresh consideration.
    3. The assessee must appear before the respondent without fail and submit a comprehensive reply along with robust supporting documents.
    4. Consequent to the setting aside of the assessment order, any consequential bank account attachment carried out by the department shall stand raised (lifted) immediately.

Important Clarification

  • Conditional Remand Precedent: The ruling reaffirms that while High Courts are willing to condone structural lapses (like missing portal notifications) under the umbrella of natural justice, such reliefs are not unconditional. The requirement to pre-deposit 25% of the disputed tax serves as a safeguard against frivolous delays and ensures that taxpayers remain accountable for monitoring their legal obligations online.
  • Bank Account Relief: Once an impugned assessment order is set aside during a remand, recovery actions like bank attachments lose their legal foundation and must be released immediately.

Section Involved

  • Section 73 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017 / Central Goods and Services Tax (CGST) Act, 2017.
  • Article 226 of the Constitution of India (Writ Jurisdiction for Certiorari).

Link to download the order - https://mytaxexpert.co.in/uploads/1783059021_313compressed.pdf

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