W.P.(MD) Nos. 23113 and 23114 of 2023

Facts of the Case

Tvl. Abhinesh Enterprises, a proprietary concern represented by its proprietor Yesudasan and registered under GSTIN 33AMQPY0767Q1ZY, challenged two orders passed by the State Tax Officer, Ettayapuram, in Form GST DRC-07, both dated 06.01.2023, raising demands for the assessment years 2017-18 and 2018-19. The petitioner approached the Madurai Bench of the Madras High Court under Article 226, contending that the assessment orders were passed in violation of the principles of natural justice and applicable statutory provisions, without an effective personal hearing. The Deputy Commissioner (ST), GST Appeal, and the State Tax Officer, Ettayapuram, were arrayed as respondents. Both writ petitions were heard together and disposed of by a common order dated 22.09.2023.

Issues Involved

  1. Whether the assessment orders dated 06.01.2023 were vitiated for denial of an effective personal hearing.
  2. Whether hearing intimations communicated only through the GST web portal, without the petitioner's actual knowledge, satisfied the requirement of a genuine hearing opportunity.
  3. Whether the petitioner was entitled to a further opportunity despite having missed three portal-based notices.

Petitioner's Arguments

  • Counsel for the petitioner submitted that the impugned orders were passed in violation of natural justice.
  • It was contended that hearing intimations dated 15.12.2022, 26.12.2022 and 05.01.2023 were uploaded only on the department's web portal, and the petitioner was unaware of them.
  • The petitioner argued that having genuinely missed the notices, it should not be penalised by finalisation of the assessment without a hearing, and sought one further opportunity before the assessing authority.

Respondent's Arguments

  • The Special Government Pleader submitted that three separate opportunities for personal hearing had already been granted on 15.12.2022, 26.12.2022 and 05.01.2023.
  • Since the petitioner failed to avail any of these opportunities, the department could not be faulted, and no violation of natural justice could be attributed to the respondents.

Court Order / Findings

  • The Court noted that while three hearing intimations were indeed issued, they were communicated only through the web portal, and the petitioner had failed to notice them.
  • The Court held that the petitioner deserved one further opportunity of personal hearing in the interest of justice, notwithstanding the earlier notices having gone unanswered.
  • The impugned DRC-07 orders dated 06.01.2023 in both matters were quashed.
  • The respondents were directed to grant one more hearing, with the petitioner directed to attend without seeking adjournment, and to pass fresh orders within three weeks. Both writ petitions were allowed without costs.

Important Clarification

  • Portal-only intimation of hearing dates, while procedurally compliant, may not always satisfy the substantive requirement of an effective hearing opportunity under the GST regime.
  • Writ courts remain willing to grant one further opportunity where a taxpayer shows genuine, non-deliberate failure to notice portal communications, provided the taxpayer commits to appearing without further delay.
  • Such relief is conditional on full cooperation at the renewed hearing, failing which no further indulgence can be expected.

Sections Involved

  • Section 74, CGST/TNGST Act, 2017 — governs determination of tax not paid or short paid by reason of fraud, wilful misstatement or suppression of facts.
  • Form GST DRC-07 — the summary of the order used to communicate a demand of tax, interest and penalty.
  • Article 226, Constitution of India — invoked for a writ of certiorarified mandamus against the assessment orders.

Decision – In Favour of

The decision is in favour of the assessee, Tvl. Abhinesh Enterprises, with the assessment orders quashed and the matter remanded for a fresh personal hearing, subject to the petitioner's compliance with the timeline fixed by the Court.

Case Details

Court: Madurai Bench of the Madras High Court
Case Number: W.P.(MD) Nos. 23113 and 23114 of 2023
Coram: Hon'ble Mrs. Justice S. Srimathy
Date of Order: 22.09.2023

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.