Facts of the Case

The petitioner, Tvl.Hi Tech Traders, holding GSTIN 33MZTPS9116H1ZH, challenged an assessment order dated 05.03.2025 imposing a penalty of Rs.1,74,29,916. The order was uploaded only on the GST web portal and not otherwise communicated. Significantly, the petitioner's registration had already been cancelled on 23.08.2024, before the order was uploaded, so the petitioner had no occasion to access the web portal to notice the proceedings.

Issues Involved

  1. Whether an order uploaded solely on the GST web portal, at a time when the assessee's registration stood already cancelled (and portal access consequently unavailable), can be treated as validly served.

Petitioner's Arguments

  • Since the petitioner's registration was cancelled on 23.08.2024, it had no occasion to access the web portal on which the impugned order was uploaded, and thus never came to know of the proceedings; the petitioner undertook to remit 20% of the disputed penalty and relied on the Allahabad High Court's rulings in M/s.Ahs Steels vs the Commissioner of State Taxes and M/s.Katyal Industries vs. State of UP.

Respondent's Arguments

  • The Additional Government Pleader appeared for the respondent, State Tax Officer (Roving Squad 5).

Court Order / Findings

  • Justice G.R. Swaminathan recorded the petitioner's undertaking to remit 20% of the disputed penalty within eight weeks, and expressed agreement with the view of the Division Bench of the Allahabad High Court in M/s.Katyal Industries, applying that decision to the facts of the case.
  • The impugned order was set aside, to be treated as a fresh show cause notice, with the petitioner directed to file its reply within 30 days; the respondent was permitted to issue a fresh order on merits within three months after hearing the petitioner.
  • Non-compliance by the petitioner would entitle the respondent to proceed as if the writ petition stood dismissed in limine on the ground of laches; on payment of the 20% deposit as undertaken, the attachment on the petitioner's bank account was directed to be lifted.

Important Clarification

  • Where a taxpayer's GST registration is cancelled before a subsequent order is uploaded solely on the portal, the taxpayer cannot reasonably be expected to have accessed the portal to notice the proceedings; such an order is liable to be set aside and treated as a fresh show cause notice, subject to a partial pre-deposit, per the approach endorsed in the Allahabad High Court's Katyal Industries line of cases.

Sections Involved

  • Form GST DRC-07, CGST Rules, 2017 — summary of the order raising demand of tax/penalty.
  • Section 169, GST Act, 2017 — modes of service, considered inapplicable in substance where portal access was practically foreclosed by prior registration cancellation.

Decision – In Favour of

Disposed of with conditional directions, in part in favour of the Assessee — order set aside subject to 20% pre-deposit, treated as a fresh show cause notice, and bank attachment lifted on compliance.

Case Details

Court: Madurai Bench of Madras High Court
Case No.: W.P(MD)No.33048 of 2025 and W.M.P(MD)Nos.26044 & 26046 of 2025
Coram: Hon'ble Mr. Justice G.R. Swaminathan
Date of Order: 19.11.2025

Link to Download the Order

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