Facts of the Case

The petitioner, D.S.Muthuchamy, challenged an assessment order dated 30.04.2024 for the tax period April 2018 to March 2019, passed by the Deputy State Tax Officer, Palani, under the CGST/TNGST Act, 2017. The order was preceded by a show cause notice in Form GST DRC-01 dated 27.12.2023 and three reminders. The petitioner did not participate in the proceedings and suffered an adverse ex-parte order, explaining that the notices and even the order itself, being uploaded only on the GST web portal, went unnoticed.

Issues Involved

  1. Whether an ex-parte assessment order passed after the taxpayer failed to notice portal-only notices deserves outright quashing or conditional relief.
  2. What terms are appropriate to balance the taxpayer's opportunity to contest on merits against the revenue's interest.

Petitioner's Arguments

  • The show cause notice, reminders and even the impugned order were issued only through the GST web portal and were never actually noticed by the petitioner.
  • This resulted in the petitioner being unable to respond or even realise that an adverse order had been passed until much later.

Respondent's Arguments

  • The Government Advocate did not dispute the facts but left the question of relief to the Court's discretion, consistent with the Court's settled practice in similar portal-notice cases.

Court Order / Findings

  • The Court was inclined to grant relief to the petitioner in the facts and circumstances, following its consistent practice of assisting taxpayers who miss portal-only communications, provided suitable safeguards for revenue are built in.
  • The Court quashed the impugned assessment order on terms, conditional on the petitioner depositing 25% of the disputed tax from the Electronic Cash Register within 30 days, with the order to be treated as an addendum to the original show cause notice.
  • The petitioner was directed to file a reply to the show cause notice within the same period, following which the respondent was to pass a fresh order on merits, preferably within three months after hearing the petitioner; failure to comply would result in the writ being deemed dismissed, leaving the department free to proceed for recovery.

Important Clarification

  • Where an assessee genuinely misses portal-only GST notices and consequently suffers an ex-parte order, courts in Tamil Nadu have adopted a consistent conditional-relief formula: quashing the order as an addendum to the SCN on payment of 25% of the disputed tax, rather than either an outright quash or an outright dismissal.
  • This balances the taxpayer's right to be heard on merits against the revenue's interest in securing part-payment, without disturbing the underlying validity of portal-based service.

Sections Involved

  • Section 74, CGST/TNGST Act, 2017 – determination of tax involving fraud, wilful misstatement or suppression, under which the order was passed.
  • Form GST DRC-01, CGST Rules, 2017 – summary of show cause notice preceding the assessment.

Decision – In Favour of

Disposed of with directions, in part in favour of the assessee — order quashed conditional on 25% pre-deposit, with fresh adjudication on merits directed.

Case Details

Madurai Bench of Madras High Court; W.P.(MD)No.20019 of 2025 with W.M.P.(MD)No.15411 of 2025; Coram: Hon'ble Mr Justice C. Saravanan; Date: 24.07.2025.

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