Case Law Details
Namasivaya Auto Parts Vs Deputy State Tax Officer I (Madras High Court)
HC quashes Ex-Parte Order and directs the department to ensure proper service of notice through various modes in order to ensure that the object of Section 169 is fulfilled
The Hon’ble Madras High Court in M/s Namasivaya Auto Parts v. The Deputy State Tax Officer I set aside the ex-parte order dated December 27, 2023 (“Impugned Order”) passed against the Petitioner on the ground that the show cause notices (“SCN”) along with the reminder notices were served only by uploading on the GST portal do not amount to effective service, especially where no further steps were taken by the officer despite the Petitioner being non-responsive.
Facts:
Namasivaya Auto Parts (“the Petitioner”) challenged the Impugned Order passed by the Deputy State Tax Officer I (“the Respondent”) for the assessment year 2017–18.
The Respondent issued an intimation in Form DRC-01A on August 28, 2023 and a SCN in Form DRC-01 on September 15, 2023 via the GST common portal. The Petitioner did not respond to the notice nor avail the opportunity for personal hearing despite reminder notices being sent by the Respondent, leading to the confirmation of the proposed demand.
The Petitioner contended that neither the SCN nor the Impugned Order were served physically or by registered post, and that uploading of the same on the portal under the “Additional Notices and Orders” tab did not bring the proceedings to their attention.
Issue:
Whether service of notices solely through the GST portal without resorting to other valid modes under Section 169 of the GST Act constitutes effective service of Notice?
Held:
The Hon’ble Madras High Court in WP No. 19315 of 2025, held as under:
- Observed that, although uploading notices on the GST portal constitutes a valid mode of service under Section 169 of the CGST Act, this alone may not amount to effective service when the taxpayer fails to respond.
- Noted that, the Respondent had issued multiple reminders but failed to explore other statutorily prescribed service methods, such as RPAD, despite continued non-response by the Petitioner.
- Held that, when no reply is received to notices served via a particular mode, it is incumbent upon the officer to take additional steps to ensure effective service. Fulfilling procedural formalities without ensuring that the taxpayer has actual knowledge of the notice defeats the purpose of adjudication and leads to avoidable litigation.
- Set aside the Impugned order dated December 27, 2023 and remanded the matter back to the Respondent for fresh consideration and directed the Petitioner to deposit 25% of the disputed tax amount as a precondition for remand.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Challenging the order dated 27.12.2023 passed by the respondent relating to the assessment year 2017-18, the petitioner had filed the present Writ Petition.
2. Mrs. K. Vasanthamala, learned Government Advocate (Tax), takes notice on behalf of the respondent. By consent of the parties, the main Writ Petition is taken up for disposal at the time of admission stage itself.
3. The learned counsel for the petitioner submitted that an intimation notice in Form DRC-01A dated 28.08.2023, followed by which, a show cause notice in Form DRC-01 dated 15.09.2023 were issued to the petitioner through GST common portal. Thereafter, personal hearing opportunity was also granted to the petitioner and reminder notice thereon. However, the petitioner had neither filed its reply nor availed the opportunity of personal hearing. Hence, the impugned order came to be passed by the respondent, confirming the proposals
4. The impugned order is challenged on the premise that neither the show cause notices nor the impugned order of assessment has been served by tendering to the petitioner or by registered post, instead it was uploaded in the common portal under the head “Additional Notices and Orders” tab, thereby, the petitioner was unaware of the initiated proceedings and thus unable to participate in the adjudication proceedings.
5. It was further submitted that the petitioner is ready and willing to pay 25% of the disputed tax and that he may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to which the learned Government Advocate appearing for the respondent does not have any serious objection.
6. Considering the above submissions made by the learned counsel on either side and upon perusal of the materials, it is evident that the impugned show cause notice was uploaded on the GST Portal Tab. According to the petitioner, the petitioner was not aware of the issuance of the 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.
7. No doubt sending notice by uploading in portal is a sufficient service, but, the Officer who is sending the repeated reminders, inspite of the fact that no response from the petitioner to the show cause notices etc., the Officer 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 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 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.
8. Therefore, this Court finds that there is a lack of opportunities being provided to serve the notices/orders etc., effectively to the petitioner. Hence, this Court is inclined to set-aside the impugned order with terms, by issuing the following directions:-
i. The impugned order dated 27.12.2023 passed by the respondent is set aside.
ii. Consequently, the matter is remanded to the respondent for fresh consideration.
iii. The petitioner is directed to deposit 25% of the disputed tax, which the petitioner had voluntarily come forward to make such payment, within a period of two weeks from the date of receipt of a copy of this order.
iv. Thereafter, the petitioner is directed to file a reply along with supportive documents, if any, within a period of two weeks.
v. Thereupon, the respondent is directed to consider the reply and shall issue a clear 14 days notice affording an opportunity of personal hearing to the petitioner and shall decide the matter in accordance with law.
9. With the above directions, this Writ Petition is disposed of. No costs. Consequently, connected Miscellaneous Petitions are closed.
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