Raja Babu Kapra Ghar Vs Union of India through the Secretary (Patna High Court)
The Patna High Court considered a writ petition challenging an ex parte assessment order dated 06.02.2025 passed under Section 73(9) of the BGST Act, 2017 for the Financial Year 2020-21 and the consequential demand raised in Form DRC-07. The petitioner sought quashing of the assessment order on the grounds that it was passed without a reasoned order, without valid service of notices under Section 169 of the BGST Act, 2017, and without granting an opportunity of hearing as required under Sections 75(4) and 75(5) of the Act.
The petitioner submitted that it had filed its GST returns and paid the admitted tax for the relevant financial year. It later learnt from the office of the Joint Commissioner, State Tax, Siwan Circle, that an assessment order had been passed raising a demand of Rs.7,58,105.36, including tax, interest and penalty.
The petitioner contended that prior to passing the ex parte assessment order, no notice of personal hearing was uploaded under the “Notices and Orders” tab on the GST portal. Instead, the notice fixing the date of personal hearing was uploaded only under the “Additional Notices and Orders” tab. It was further asserted that no notice relating to the proceedings under Section 73 of the BGST Act was communicated through any other mode, and therefore the petitioner remained unaware of the proceedings and was deprived of the opportunity to participate.
Relying upon the decisions of the Patna High Court in M/s Lord Vishnu Construction Pvt. Ltd. v. Union of India and Others and M/s Shree Shyam Trading Co. v. Union of India and Others, as well as the Madras High Court decision in M/s Axiom Gen Nxt India Private Limited v. Commercial State Tax Officer, T. Nagar Assessment Circle, the petitioner argued that although Section 169 permits service through any of the prescribed modes, effective service requires that the assessee be made aware of the proceedings. It was also submitted that Section 75(4) confers a valuable statutory right of personal hearing before an adverse order is passed and that denial of such opportunity rendered the assessment unsustainable.
The State submitted that notices uploaded on the common portal are ordinarily also communicated to the assessee through email or SMS. However, it fairly acknowledged that the counter affidavit did not specifically answer the petitioner’s assertion that no notice had been served through any mode other than uploading it under the “Additional Notices and Orders” tab. The State further submitted that recent judicial pronouncements have favoured effective service by not merely uploading notices on the common portal but also serving them through another permissible mode, and stated that this aspect had not been adequately addressed while filing the counter affidavit.
After considering the pleadings, the High Court observed that there was no contest to the petitioner’s specific assertion that the notice of personal hearing had not been served through any mode other than uploading it under the “Additional Notices and Orders” heading. The Court held that, as a result, the petitioner had been deprived of a valuable opportunity of hearing. In these circumstances, the Court found it appropriate to set aside the impugned assessment order and grant the petitioner an opportunity to file a show cause reply and participate in the proceedings.
Accordingly, the High Court set aside the impugned assessment order and consequential demand. The petitioner was directed to appear through its authorised representative or lawyer on or before 13 August 2025. The Joint Commissioner, State Tax, Siwan Circle, or the competent authority was directed to grant the petitioner an opportunity to file a show cause reply and a personal hearing, and thereafter pass a reasoned order, preferably within four months. The writ petition was allowed to that extent.
Cases Discussed
- M/s Axiom Gen Nxt India Private Limited Vs. Commercial State Tax Officer, T. Nagar Assessment Circle (Madras High Court), W.P. No. 1114 of 2025
- M/s Shree Shyam Trading Co. Vs. Union of India and Others (Patna High Court), CWJC No. 5661 of 2025
- M/s Lord Vishnu Construction Pvt. Ltd. Vs. Union of India and Others (Patna High Court), CWJC No. 5291 of 2024
FULL TEXT OF THE JUDGMENT/ORDER OF PATNA HIGH COURT
Heard Mr. Mohit Agrawal, learned counsel for the petitioner, Mr. Vivek Prasad, learned GP-7 for the State as also Mr. Amit Pandey, learned Senior Counsel for the CGST and CX.
2. The petitioner in the present writ application is seeking the following reliefs:-
“(a) For quashing the ex parte assessment order dated 06.02.2025 passed under Section 73(9) of the BGST Act, 2017 by the Joint Commissioner, State Tax, Siwan Circle, Siwan and subsequent demand raised in Form DRC 07 dated 06.02.2025 with respect to Financial Year 2020-21 as the same has been raised without passing a reasoned and detailed order merely by confirming the demand raised in DRC-01 and also without service of any notice, much less, show cause notice by any mode of service as contemplated under Section 169 of the BGST Act, 2017 and granting opportunity of hearing in terms of Section 75(4) AN 75(5) of the BGST Act, 2017;
(b) For holding that passing of the ex parte impugned assessment order dated 06.02.2025 without recording any reason and merely by confirming the demand raised in DRC-01 is non-est in the eyes of law and thus, the impugned assessment order is liable to be quashed;
(c) For holding that as the petitioner firm was not served with the purported show cause notices or reminders or the impugned ex parte assessment order by a valid mode of service as contemplated under Section 169 of the BGST Act, 2017, the same amounts to violation of principles of natural justice and the impugned order is liable to be quashed and set aside;
(d) For holding that mere uploading of Notices under the heading of ‘Additional Notices and Orders’ on the GST portal cannot be considered to be a valid mode of service of notice as required under Section 169 of the BGST Act, 2017;
(e) For holding that in the facts of the present case, the impugned assessment order dated 06.02.2025 is an ex parte order as the notices were never served upon the Petitioner firm in terms of Section 169 of the BGST Act, 2017 nor the petitioner was granted an opportunity of hearing in terms of Section 75(4) of the BGST Act, 2017 as the reminders were also not served upon the petitioner in the manner prescribed under Section 169 of the BGST Act, 2017; and/or for any other relief(s) as Your Lordships may deem fit and proper in the facts of the present case and in the interest of justice.”
Brief Facts of the Case
3. It is the case of the petitioner that for the financial year 2020-21, he filed his return and deposited the admitted tax as per its Books of Account, however, he learnt from the office of the Respondent Joint Commissioner, State Tax, Siwan Circle, Siwan that the impugned order dated 03.08.2023 has been passed under Section 75(3) of the Bihar Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘BGST Act, 2017’). The assessing authority has raised a demand including interest and penalty to the tune of Rs. 7,58,105.36/-.
Submissions on behalf of the Petitioner
4. Mr. Mohit Agrawal, learned counsel for the petitioner submits that prior to passing the ex-parte order of assessment, the Respondent Authorities did not place the notice of personal hearing on the portal under heading ‘Notices and Orders’. The screenshot of the portal showing ‘Notices and Orders’ has been brought on record as Annexure ‘P/1’. It is stated that in fact, the notice giving the dates of personal hearing was placed under the heading ‘Additional Notices and Orders’ copy of which is Annexure ‘P/2’ to the writ application.
5. Learned counsel submits that even if it is assumed for an argument sake that the notice giving the date of personal hearing could have been placed under the heading ‘Additional Notices and Orders’, in the facts of the present case, it cannot be said to be an effective service of notice inasmuch as the petitioner was not made aware of the placing of the notice of hearing under the heading ‘Additional Notices and Orders’ on the common portal. Referring to the statements made in paragraph ‘16’ of the writ application, learned counsel submits that there is specific statement of the petitioner that no notice giving rise to the impugned proceeding initiated under Section 73 of the BGST Act, 2017 were communicated to the petitioner by any mode other than merely uploading the same under ‘Additional Notices and Orders’ heading on common portal.
6. Learned counsel relies upon the judgment of this Court in the case of M/s Lord Vishnu Construction Pvt. Ltd. Vs. The Union of India and Others in CWJC No. 5291 of 2024. Learned counsel also relies upon the judgment of the learned coordinate Bench of this Court in case of M/s Shree Shyam Trading Co., Vs. The Union of India and Others in CWJC No. 5661 of 2025 and reliance is also placed upon a judgment of the Hon’ble Madras High Court in the case of M/s Axiom Gen Nxt India Private Limited Vs. Commercial State Tax Officer, T. Nagar Assessment Circle in P. No. 1114 of 2025.
7. Learned counsel submits that a conjoint reading of the judgments would show that even though the Hon’ble Courts have noticed that Section 169 of the Central Goods and Services Tax/BGST Act, 2017 (in short ‘CGST/BGST Act, 2017’) provides for service of notices by any one of the modes provided under Section 169, taking a prudent view of the matter, the Courts have held that an effective service of notice is required to be done and for that purpose, the authority should ensure that the notices are served through at least two modes. It is submitted that on the face of the specific statement of the writ petitioner that he was not aware of the uploading of the notice of hearing by any other mode, the writ application is fit to be allowed.
8. It is further submitted that the legislatures have conferred a right to hearing under sub-section (4) of Section 75 of the CGST/BGST Act, 2017 to an assessee before passing of any adverse order by the tax authorities. If the impugned orders are not set aside and an opportunity is not given to the petitioner to place his case before the tax authorities, the petitioner is likely to suffer.
Submissions on behalf of the Respondents
9. Mr. Vivek Prasad, learned GP-7 for the State has opposed the writ application. Learned counsel submits that normally when a notice is uploaded on the common portal either under heading ‘Notices and Orders’ or the ‘Additional Notices and Orders’, the same is also communicated to the assessee either on his e-mail or through SMS.
10. Learned counsel, however, submits that in the present case while answering paragraph ‘16’ of the writ application, the Respondents have not given specific response to paragraph ‘16’ of the writ application.
11. Learned counsel submits that the recent judicial pronouncements on the subject have leaned in favour of the effective service of notice by not only placing the notice on the common portal but also by serving the same upon the assessee through any one of the alternative modes. Since the judgments have come recently, while drafting the counter affidavit, this aspect of the matter could not be adequately dealt with.
Consideration
12. Having heard learned counsel for the petitioner and learned GP-7 for the State respondents as also upon consideration of the entire pleadings available on the record, we are of the considered opinion that in this case, there being no contest to the statement of the petitioner made in paragraph ‘16’ of the writ application that the notice of personal hearing was not served upon the petitioner by any other mode except by way of placing the same under the heading ‘Additional Notices and Orders’ and for that reason, the petitioner has been deprived of a valuable opportunity of hearing, this Court is of the considered opinion that the impugned orders be set aside and an opportunity to file show cause and personal hearing be granted to the petitioner to appear before the Respondent Authorities and make his submissions.
13. Accordingly, this Court sets aside the impugned orders. The petitioner shall appear through his authorized representative/lawyer, as the case may be, within three weeks from today i.e. on or before 13th August, 2025.
14. The Respondent No. 7 i.e. the Joint Commissioner, State Tax, Siwan Circle, Siwan or any other competent authority dealing with the matter shall give an opportunity to file show cause and personal hearing to the petitioner through his representative. The Joint Commissioner, State Tax, Siwan Circle/the competent authority, as the case may be, shall pass a reasoned order after giving personal hearing to the petitioner but preferably within a period of four months from today.
This writ application is allowed to the extent indicated hereinabove.
