Subhraa International Portfolio Management Services Vs Deputy State Tax Officer (Madras High Court)
Summary: The Madras High Court, in M/S. Subhraa International Portfolio Management Services Vs The Deputy State Tax Officer 2 (ST), examined whether uploading GST notices on the common portal was sufficient where the taxpayer repeatedly failed to respond and an adverse assessment order was passed without providing a personal hearing. The petitioner challenged the assessment order dated 4 June 2026, contending that it had not viewed the communications uploaded on the portal and consequently could not submit its objections. The Revenue maintained that the notices were duly uploaded but admitted that no opportunity of personal hearing had been granted. Both sides supported fresh adjudication subject to the petitioner paying ₹1 lakh. The Court recognised that portal uploading constitutes a valid mode of service under Section 169 of the GST Act. However, it held that where repeated notices produce no response, the officer should apply their mind and explore other prescribed modes, preferably registered post with acknowledgement due. The Court observed that mechanical compliance with service formalities, without ensuring an effective opportunity, results in unnecessary litigation. It accordingly set aside the assessment and remanded the matter for fresh consideration, conditional upon payment of ₹1 lakh within four weeks of receiving the order. The setting aside would become effective upon payment. The petitioner was allowed three further weeks to file objections and supporting documents, followed by a clear 14-day personal-hearing notice. The Court also directed Axis Bank to de-freeze the petitioner’s bank account immediately upon production of the judgment and proof of payment. The ruling emphasises effective communication, procedural fairness and meaningful hearing in GST adjudication.
1. The Issue
The assessee challenged an assessment order dated 4 June 2026. The Department had uploaded the show-cause notice and subsequent communications on the GST common portal. The assessee did not view the notices, filed no reply and was not granted a personal hearing. The order confirmed the proposal ex parte, and the assessee’s bank account was attached.
The legal issue was not whether portal upload is per se invalid. The Court accepted that it is a statutorily recognised mode. The real question was whether the Department could treat portal upload as complete compliance where repeated communications attracted no response and the consequence was an adverse ex parte assessment without a personal hearing.
2. Department’s Arguments
The Revenue submitted that notices had been uploaded on the GST portal, but the assessee failed to act upon them. On that basis, it contended that the assessee had not availed the opportunity available in law.
Importantly, the Revenue fairly admitted that no personal hearing had been provided before passing the impugned order. It supported remand, provided the assessee was directed to make a payment of ₹1 lakh as a condition for reopening the adjudication.
The Department’s strongest position was that a registered person must monitor the common portal, and failure to do so cannot ordinarily disable a valid statutory service mechanism.
3. Assessee’s Arguments
The assessee contended that it was unaware of the portal-uploaded notices and hence could not furnish a reply. It argued that the assessment was passed without effective opportunity and without personal hearing.
The assessee offered to deposit ₹1 lakh and requested restoration of the matter to the adjudicating authority. It also sought de-freezing of its attached bank account once the assessment order was set aside.
4. Holding and Reasoning
The Court set aside the assessment order and remanded the matter for fresh adjudication.
The ratio deserves careful reading. The Court did not hold that portal service is invalid. On the contrary, it expressly accepted that uploading a notice on the portal is sufficient service. But it held that service cannot become an empty statutory ritual where repeated notices generate no response and the officer takes no additional step to make communication effective.
Paragraphs 9 and 10 contain the operative principle. Where there is no response to notices sent through one mode, the officer should apply mind and explore other modes permitted by Section 169(1), preferably registered post with acknowledgement due. Otherwise, the process is reduced to formality, resulting in avoidable litigation.
The Court treated absence of personal hearing as material. It was not a case where the assessee had responded, chosen not to attend a hearing or deliberately delayed proceedings. The record showed an ex parte confirmation without any personal hearing. The Court therefore set aside the assessment on the condition that the assessee deposit ₹1 lakh within four weeks.
The assessee was granted three weeks thereafter to file objections with supporting documents. The Department was directed to issue a clear 14-day hearing notice and decide the matter on merits. As the assessment itself was set aside, the attached bank account was ordered to be de-frozen upon proof of the stipulated payment.
5. Then and Now: The Pre-GST Lineage
The underlying principle has a clear pre-GST indirect-tax lineage. In Kesar Enterprises Ltd. v. State of U.P., (2011) 13 SCC 733, the Supreme Court held that an excise demand with penal consequences could not be enforced without adjudication and an effective opportunity of hearing. Natural justice had to be read into the power because the action carried serious civil consequences.
The decision did not turn on a particular mode of service. Its broader relevance is that an administrative convenience cannot substitute a meaningful chance to meet the case. The Court held that recovery without adjudication of the alleged breach and without hearing was void.
GST has modernised the communication mechanism through Section 169 and the common portal. It has not diluted the essential requirement that adjudication must be fair. Subhraa International translates that pre-GST natural-justice discipline into the portal era: legal validity of a mode of service does not automatically establish adequacy of opportunity in every factual setting.
6. Allied Law Lens
The decision fits within Article 14’s prohibition on arbitrary State action. Section 169 provides multiple permissible modes of service; it does not compel the Department to persist mechanically with one mode when its ineffectiveness is apparent.
The Court’s reasoning does not impose a universal requirement of RPAD in every proceeding. Its concern was factual: repeated silence, no personal hearing and an ex parte order with adverse consequences. The inference is that officers must exercise procedural discretion, not merely complete a portal workflow.
7. Analysis and Conclusion
The judgment is balanced. It does not encourage taxpayers to ignore the portal and later plead ignorance as an automatic defence. Portal monitoring remains a serious compliance obligation, particularly for registered persons and their authorised representatives.
At the same time, the decision gives content to the word “opportunity”. Where the portal history shows no participation, no reply and no response to reminders, an officer should pause before passing an ex parte demand. A quick Section 169 follow-up by RPAD, registered e-mail, physical delivery or another authorised mode can protect the adjudication from being set aside later.
The ruling is particularly relevant where bank attachment follows swiftly upon an ex parte order. The cost of one additional service step is substantially lower than the cost of remand, fresh adjudication, appellate proceedings and disruption of the assessee’s business.
8. Practice Tips
- Maintain evidence of portal monitoring: login logs, internal compliance tracker, authorised-user records and screenshots of the “Additional Notices and Orders” tab.
- In every reply or appeal, obtain the complete service trail: portal upload dates, email logs, SMS alerts, RPAD tracking and hearing-notice history.
- If no hearing was granted, plead specific prejudice: documents not filed, reconciliations not considered and factual explanations not examined.
- Officers should record reasons before proceeding ex parte and use an additional Section 169 mode where reminders remain unanswered.
- If bank attachment follows an ex parte order, seek consequential de-freezing when the order is remanded or set aside.
Cases Discussed
- Kesar Enterprises Ltd. Vs State of U.P. & Ors., (2011) 13 SCC 733; Civil Appeal No. 6896 of 2002; 06/07/2011 (Supreme Court) — The Supreme Court held that the recovery of penalty and interest without adjudication and an opportunity of hearing violated the principles of natural justice. The precedent is discussed in the accompanying editorial analysis as part of the pre-GST legal background; it is not cited in the original Madras High Court order.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition has been filed challenging the impugned order dated 04.06.2026 passed by the 1st respondent.
2. Ms.G.Dhana Madhri, learned Special Government Pleader, takes notice on behalf of the 1st respondent.
3. By consent of the parties, the main writ petition is taken up for disposal at the admission stage itself.
4. The learned counsel for the petitioner would submit that in this case, all notices/communications were uploaded by the respondent in the GST common portal. Since the petitioner had failed to view the portal, they were not aware of the said notices, due to which, they failed to file their reply within the time. Under these circumstances, the impugned order came to be passed by the respondent without providing any opportunity of personal hearing to the petitioner. Hence, this petition has been filed.
5. Further, he would submit that the petitioner is ready and willing to pay a sum of Rs.1,00,000/- to the respondent. Hence, he requests this Court to grant an opportunity to the petitioner to present their case before the respondent by setting aside the impugned order.
6. On the other hand, the learned counsel appearing for the respondent would submit that the respondent had uploaded the notices in the GST Online Portal. But the petitioner failed to avail the said opportunity. Further, she has fairly admitted that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Therefore, she requested this Court to remit the matter back to the respondent, subject to the payment of Rs.1,00,000/- by the petitioner.
7. Heard the learned counsel for the petitioner and the respondent and also perused the materials available on record.
8. In the case on hand, it is evident that the show cause notice was uploaded on the GST Portal Tab. According to the petitioner, he was not aware of the issuance of the said show cause notice issued through the GST Portal and the original of the said show cause notice was not furnished to them. In such circumstances, this Court is of the view that 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.
9. No doubt, sending notice by uploading in portal is a sufficient service, but, the Officer, who is sending the repeated reminders, despite the fact that no response from the petitioner to the show cause notices etc., should have applied his/her mind and explored the possibility of sending notices by way of other modes prescribed in Section 169 of the GST Act, which are also the valid mode of service under the Act, otherwise it will not be an effective service, rather, it would only amount to fulfilling the empty formalities. Merely passing an ex parte order by fulfilling the empty formalities will not serve any useful purpose and the same will only pave way for multiplicity of litigations, not only wasting the time of the Officer concerned, but also the precious time of the Appellate Authority/Tribunal and this Court as well.
10. Thus, when there is no response from the tax payer to the notice sent through a particular mode, the Officer who is issuing notices should strictly explore the possibilities of sending notices through some other mode as prescribed in Section 169(1) of the Act, preferably by way of RPAD, which would ultimately achieve the object of the GST Act. Therefore, this Court finds that there has been lack of efforts in exploring the available opportunities to serve the notices/orders etc., effectively on the petitioner.
11. Further, it was submitted by the learned counsel for the petitioner that the petitioner is ready and willing to pay a sum of Rs.1,00,000/- to the respondent. In such view of the matter, this Court is inclined to set aside the impugned order dated 04.06.2026 passed by the 1st respondent. Accordingly, this Court passes the following order:-
(i) The impugned order dated 04.06.2026 is set aside and the matter is remanded to the 1st respondent for fresh consideration on condition that the petitioner shall pay a sum of Rs.1,00,000/- to the 1st respondent, within a period of four weeks from the date of receipt of a copy of this order. The setting aside of the impugned order will take effect from the date of payment of the said amount.
(ii) The petitioner shall file their reply/objection along with the required documents, if any, within a period of three weeks from the date of payment of amount as stated above.
(iii) On filing of such reply/objection by the petitioner, the 1st respondent shall consider the same and issue a 14 days clear notice, by fixing the date of personal hearing, to the petitioner and thereafter, pass appropriate orders on merits and in accordance with law, after hearing the petitioner, as expeditiously as possible.
(iv) Considering the fact that the impugned order itself has been set aside, this Court is of the opinion that the attachment made on the bank account of the petitioner cannot survive any longer. As a sequel, the 2nd respondent-Bank is directed to de-freeze the bank account of the petitioner, immediately upon the production of a copy of this order along with the proof with regard to the payment made by the petitioner as stated above.
12. With the above directions, this writ petition is disposed of. No costs. Consequently, the miscellaneous petition in WMP.No.50362 of 2026 is closed. The miscellaneous petition in WMP.No.50361 of 2026, which has been filed to dispense with the production of original assessment order, is ordered.
