Tvl. Sri Mathuru Eswarar Traders Vs Deputy State Tax Officer – I (Madras High Court)
Madras High Court has underscored the necessity of effective service for Goods and Services Tax (GST) notices, ruling that tax authorities must resort to physical modes like Registered Post Acknowledgement Due (RPAD) if notices uploaded on the GST portal fail to elicit a response from taxpayers. The court’s directive came in the case of Tvl. Sri Mathuru Eswarar Traders vs Deputy State Tax Officer – I, where it set aside an assessment order passed without providing the petitioner an adequate opportunity to respond.
The petitioner, Tvl. Sri Mathuru Eswarar Traders, a commission agency involved in cotton ginning, sought to quash an assessment order dated December 30, 2024, for the assessment year 2023-2024. The petitioner also sought a re-assessment with a personal hearing and the defreezing of its bank account.
According to the petitioner, a show cause notice dated September 16, 2024, alleging the availment of input tax credit from a non-existent dealer and demanding Rs. 9,67,531.46 (including penalty and interest), was uploaded on the GST portal. The petitioner claimed unawareness of this upload, leading to no reply being filed. Subsequently, the first respondent issued the impugned assessment order, confirming the tax demand. The petitioner argued that the order was passed without proper service of the show cause notice, severely impacting their business due to the levy of interest and penalty and a subsequent bank attachment.
