Facts of the Case

Tvl.Hi Tech Traders (GSTIN 33MZTPS9116H1ZH) challenged an assessment order dated 08.10.2024 (Ref. ZD331024049916F, Form GST DRC-07) imposing a penalty of Rs.20,67,616. The petitioner's registration had already been cancelled on 23.08.2024, and the impugned order was only uploaded on the GST web portal without any other mode of communication. Since its registration stood cancelled, the petitioner had no occasion to access the portal and remained unaware of the order until it was too late to respond within limitation.

Issues Involved

  1. Whether an assessment order communicated solely through the web portal can be treated as validly served on an assessee whose GST registration already stands cancelled.

Petitioner's Arguments

  • The order was never communicated beyond being uploaded on the web portal, and the petitioner, having no reason to access the portal after cancellation of its registration, had no occasion to see it.
  • Relied on the Allahabad High Court's decisions in M/s. Ahs Steels v. The Commissioner of State Taxes and M/s. Katyal Industries v. State of U.P., and undertook to remit 20% of the disputed penalty within eight weeks.

Respondent's Arguments

  • No specific rebuttal beyond appearance through the Additional Government Pleader; the order's validity was tested primarily on the service issue raised by the petitioner.

Court Order / Findings

  • The Court agreed with the reasoning in M/s. Katyal Industries and applied it to the facts of the present case.
  • The impugned order was set aside and directed to be treated as a show-cause notice; the petitioner was directed to file its reply within 30 days.
  • The respondent was permitted to issue a fresh order on merits, preferably within three months, after hearing the petitioner.
  • On payment of 20% of the disputed penalty as undertaken, the attachment on the petitioner's bank account was to be lifted; failure to comply with the stipulations would allow the respondent to proceed as if the writ petition had been dismissed in limine on grounds of laches.

Important Clarification

  • An assessee whose GST registration has already been cancelled cannot be expected to monitor the GST web portal, and service of an order solely by uploading it there, without any other mode of communication, is not treated as effective service.
  • Rather than a blanket quashing, courts have increasingly converted such a defectively-served order into a fresh show-cause notice, conditioned on a partial pre-deposit, balancing the assessee's right to be heard with the revenue's interest in the disputed amount.

Sections Involved

  • Section 73 of the TNGST Act, 2017 — determination of tax not paid/short paid, culminating in Form GST DRC-07.
  • Principle on service of notice/order via the GST web portal on an assessee with cancelled registration.

Decision – In Favour of

In favour of the Assessee (conditionally) — the order was set aside and converted into a show-cause notice, subject to a 20% pre-deposit and a fresh hearing on merits.

Case Details

Court: Madurai Bench of the Madras High Court — Case No.: W.P(MD) No. 33046 of 2025 with W.M.P(MD) Nos. 26040 & 26043 of 2025 — Coram: Hon'ble Justice G.R. Swaminathan — Date of Order: 19 November 2025.

Link to Download the Order

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