Facts of the Case

The petitioner, Snekha Agency, challenged an order dated 14.10.2024 (GSTN 33AWHPM7660HIZC) passed by the State Tax Officer-II (Inspection), for the tax period July 2017 to March 2018, arising out of a mismatch found between Form GSTR-2A and Form GSTR-3B. The petitioner had already paid the tax component in dispute; only interest and penalty were confirmed by the impugned order. The petitioner's case was that it could not place its materials on record because the show cause notice and the subsequent order were merely uploaded online, without an effective opportunity being availed of.

Issues Involved

  1. Whether an order confirming interest and penalty following a GSTR-2A/GSTR-3B mismatch, passed solely on the basis of notices and orders uploaded online without a real hearing, could be sustained.
  2. Whether the petitioner should be granted a further opportunity to place materials and reply before the authority, given the tax itself already stood paid.

Petitioner's Arguments

  • The tax component of the demand had already been paid; only interest and penalty were confirmed by the impugned order.
  • The reasons given in the petitioner's affidavit for not availing the opportunity to place materials when the show cause notice was issued should be taken into account.
  • The proceedings were conducted only by uploading the notice and the order online, without effective opportunity being given.

Respondent's Arguments

  • The Additional Government Pleader appeared for the respondents; no specific rebuttal is recorded to the petitioner's submission regarding lack of effective opportunity or the fact of prior tax payment.

Court Order / Findings

  • Taking into account that the tax had already been paid, that only interest and penalty were in dispute, and that the proceedings were conducted purely through online upload of notice and order, the Court held that an opportunity ought to be granted to the petitioner to appear before the authority and place its materials on record.
  • The impugned order dated 14.10.2024 was set aside and the matter remitted to the second respondent, with the petitioner directed to appear without fail, furnish documents, and place its reply on record, and to cooperate for the completion of proceedings as early as possible.
  • The authority was directed to consider the matter afresh and pass fresh orders.

Important Clarification

  • Where an order confirming a GSTR-2A/GSTR-3B mismatch demand is passed by merely uploading the notice and order online, without the assessee having a genuine opportunity to respond, courts will readily set aside such an order for a fresh hearing.
  • The fact that the underlying tax has already been paid, leaving only interest and penalty in dispute, is a relevant equitable factor favouring a remand rather than a dismissal of the writ petition on grounds of alternate remedy or delay.

Sections Involved

  • Section 73, CGST Act, 2017 — determination of tax, interest, and penalty arising from mismatch between GSTR-2A and GSTR-3B.
  • Section 169, CGST Act, 2017 — modes of service, relevant to the adequacy of portal-only communication.

Decision – In Favour of

Assessee. The mismatch order was set aside and remitted for fresh consideration after affording an opportunity of hearing.

Case Details

Court: Madurai Bench of Madras High Court
Case No.: W.P.(MD) No. 6060 of 2026 and W.M.P.(MD) Nos. 5091 and 5092 of 2026
Coram: Hon'ble Mr. Justice D. Bharatha Chakravarthy
Date of Order: 06.03.2026

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