Sree Durga Industries Vs the Deputy State Tax OFFICER-1 — GST and Indirect Tax | Madras HC (2025)

Sree Durga Industries Vs the Deputy State Tax OFFICER-1 — GST and Indirect Tax | Madras HC (2025)

What the court decided

AI extract

Outcome

Writ petition disposed of with directions: impugned order dated 26.06.2023 set aside and matter remanded to the respondent for fresh consideration, conditional on the petitioner paying 25% of the disputed tax amount within four weeks (setting aside effective from date of payment); reply/objections with documents within three weeks of payment; respondent to consider the reply, issue a 14 days clear notice fixing the date of personal hearing, and pass appropriate orders on merits and in accordance with law expeditiously; no costs; connected miscellaneous petitions closed.

Issue for consideration

Whether service of the show cause notice and reminders solely by uploading on the GST portal, without exploring the other modes of service prescribed in Section 169 of the GST Act and without any opportunity of personal hearing, rendered the ex parte assessment order unsustainable. +1 more

Court's answer

Sending notice by uploading it on the portal is sufficient service, but where repeated reminders draw no response, the officer must apply his/her mind and explore the possibility of sending notices by the other modes prescribed in Section 169 of the GST Act; otherwise the service is not effective and amounts only to fulfilling empty formalities, and an ex parte order so passed serves no useful purpose and paves the way for multiplicity of litigation.

Ratio / Principle

When there is no response from the taxpayer to a notice sent through a particular mode, the issuing officer should strictly explore the possibilities of sending notices through some other mode prescribed in Section 169(1) of the Act, preferably by RPAD; the Court found a lack of opportunities to serve the notices/orders effectively on the petitioner.

Key takeaways

On the facts, the impugned assessment order came to be passed without affording any opportunity of personal hearing to the petitioner, confirming the proposals contained in the show cause notice.ratio¶39
The impugned order dated 26.06.2023 is set aside and the matter remanded to the respondent for fresh consideration, on condition that the petitioner pays 25% of the disputed tax amount within four weeks; the setting aside takes effect only from the date of such payment; reply/objections to be filed within three weeks of payment, whereupon the respondent shall issue a 14 days clear notice fixing personal hearing and pass appropriate orders on merits and in accordance with law.ratio¶53

Detailed headnote1 paragraphs

GST – Assessment culminating in Order u/s 74 and summary in Form GST DRC-07 dated 26.06.2023 (Reference No. ZD330623117418J/2019-20) – Challenge on ground of violation of natural justice – Show cause notice and reminders uploaded only under the 'View Additional Notices and Orders' column of the GST common portal; originals not furnished; no personal hearing afforded before ex parte order – Held: uploading a notice on the portal is sufficient service, but when repeated reminders elicit no response, the officer must apply his/her mind and explore the other modes of service prescribed in Section 169 of the GST Act, preferably RPAD under Section 169(1); failure renders the service ineffective and reduces it to empty formalities, and an ex parte order so passed serves no useful purpose and breeds multiplicity of litigation – Impugned order set aside and matter remanded for fresh consideration on condition that the petitioner pays 25% of the disputed tax within four weeks, the setting aside taking effect from the date of payment – Reply/objections within three weeks of payment; respondent to issue 14 days clear notice of personal hearing and decide afresh on merits – Writ petition disposed of, no costs; connected miscellaneous petitions closed (Madras High Court, Krishnan Ramasamy J).