Case Law Details
Tvl. Sri Ganesh Murugan Modern Rice Mill Vs State Tax Officer (Madras High Court)
Madras High Court held that passing of ex-parte order and imposing penalty under section 125 of the GST Act is not sustainable since GST notice was uploaded only in the GST portal and not served physically. Accordingly, matter remanded back for fresh consideration.
Facts- The challenge in the present writ petition is made against the impugned order dated 23.07.2024 and consequential order dated 23.07.2024 passed by the 1st respondent. The petitioner contested that, in the present case, return was not filed by the petitioner for the period from April 2019 to March 2020. The reason for not filing of the return was due to the non-serving of the physical copy of the notices. In the present case, show cause notice and personal hearing notices were only uploaded in the GST portal and the same were not served to the petitioner physically. Hence, the petitioner was not aware of the same and as a result, he could not file his return for the above said period. However, without hearing him, the impugned order came to be passed, imposing late fee and penalty.
Conclusion- Held that the impugned assessment dated 23.07.2024 and consequential order dated 23.07.2024 passed by the 1st respondent are set aside. Consequently, the matter is remanded to the 1st respondent for fresh consideration. While remanding the matter, it is made clear that, the impugned orders are set aside subject to the condition that, the petitioner deposits the late fee, within a period of three weeks from the date of receipt of a copy of this order. Upon making of such deposit, the petitioner shall file his reply along with supportive documents within a period of two weeks, and thereupon, the 1st respondent shall consider the reply and shall issue a clear 14 days notice affording an opportunity of personal hearing to the petitioner and then, to decide the matter in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Heard Mr.S.Vishnupriya, learned counsel appearing for the petitioner and Mr.V.Prashanth Kiran, learned Government Advocate who takes notice on behalf of the 1st respondent.
2. By consent of both the parties, this Writ Petition is taken up for final disposal at the stage of admission itself.
3. The challenge in the present writ petition is made against the impugned order dated 23.07.2024 and consequential order dated 23.07.2024 passed by the 1st
4. The learned counsel for the petitioner would submit that, in the present case, return was not filed by the petitioner for the period from April 2019 to March 2020. The reason for not filing of the return was due to the non-serving of the physical copy of the notices. The learned counsel would submit that, in the present case, show cause notice and personal hearing notices were only uploaded in the GST portal and the same were not served to the petitioner physically. Hence, the petitioner was not aware of the same and as a result, he could not file his return for the above said period. However, without hearing him, the impugned order came to be passed, imposing late fee and penalty.
5. The learned counsel would further submit that, the imposition of penalty under Section 125 is bad in law, since the petitioner was already penalised by imposing late fee under Section 47. In this regard, the learned counsel would rely upon the judgment of this Court in the case of Tvl. Jainsons Castors & Industrial Products Vs The Assistant Commissioner (ST) Chennai, reported in 2025 (2) TMI 1000. Moreover, the learned counsel would submit that, the petitioner is ready and willing to deposit the late fee, in the event, this Court set aside the impugned order and remand the matter back to the Authority for fresh consideration. Hence, he prays for appropriate orders.
6. The Learned Government Advocate appearing for the 1st respondent would submit that, in the present case, the impugned notices and orders were duly uploaded in the e-portal, but the petitioner failed to appear before the respondent on three personal hearings. Further, with regard to imposition of late fee and penalty, the Learned Government Advocate would submit that, the matter may be remanded to the Assessing Officer and let the Assessing Officer may decide the issue as to whether the late fee and penalty can be imposed as per the law laid down by this Court.
7. I have given due consideration to the submissions made on either side and perused the materials available on record.
8. In the present case, the impugned assessment order has been passed exparte. All the notices and orders were only uploaded in the e-portal and no physical copy of the notices were served to the petitioner. According to the petitioner, the petitioner has already been imposed late fee under Section 47 and therefore, no penalty under Section 125 can be imposed on the petitioner. In this regard, the learned counsel has relied upon the judgment of this Court in the case of Tvl. Jainsons Castors & Industrial Products Vs The Assistant Commissioner (ST) Chennai, reported in 2025 (2) TMI 1000.
9. However, since it was submitted by the Learned Government Advocate that, the matter may be remanded to the Assessing Officer and let all the issues raised before this Court may be decided by the Assessing Officer, this Court is inclined to pass/issue the following orders/directions:-
i) The impugned assessment dated 23.07.2024 and consequential order dated 23.07.2024 passed by the 1st respondent are set aside.
ii) Consequently, the matter is remanded to the 1st respondent for fresh consideration.
iii) While remanding the matter, it is made clear that, the impugned orders are set aside subject to the condition that, the petitioner deposits the late fee, within a period of three weeks from the date of receipt of a copy of this order.
iv) Upon making of such deposit, the petitioner shall file his reply along with supportive documents within a period of two weeks, and
v) Thereupon, the 1st respondent shall consider the reply and shall issue a clear 14 days notice affording an opportunity of personal hearing to the petitioner and then, to decide the matter in accordance with law.
vi) The respondent department also, upon production of proof with regard to payment of late fee, shall pass appropriate orders towards defreezure of the petitioner’s bank account forthwith.
10. In the result, this Writ Petition is allowed on the aforesaid terms. Consequently, connected miscellaneous petitions are closed. No costs.
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