Pioneer Products Vs State Tax Officer
Date: June 10, 2025
Subject Matter
RPAD is required for ex-parte proceedings
Summary
The Madras High Court intervened in the case of Pioneer Products Vs State Tax Officer, regarding an assessment dispute related to Goods and Services Tax (GST). The petitioner, Pioneer Products, contested an assessment order issued on January 9, 2025, alleging a violation of natural justice principles. The key argument was that critical notices (including the show cause notice DRC 01 and personal hearing notices) were only made available in the “Additional Notices and Orders” section of the GST Portal, rather than the more visible “Notices and Orders” tab. This lack of awareness prevented the petitioner from responding or attending hearings, leading to an ex-parte order. The High Court recognized the procedural failure in not serving any notices via Registered Post with Acknowledgement Due (RPAD) as required for ex-parte proceedings, violating the principles of fair hearing. Acknowledging the petitioner’s willingness to deposit 25% of the disputed tax amount, the court set aside the impugned order and remanded the matter to the tax officer for fresh consideration. The court laid down a process allowing the petitioner three weeks to deposit the tax and two weeks to file a reply after which the officer must provide a 14-day notice for a personal hearing. In conclusion, the court ruled in favor of the petitioner, emphasizing the importance of adhering to principles of natural justice and procedural correctness in tax assessment processes.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Heard Mr.J.Madhusuthanan, learned counsel appearing for the petitioner and Mrs.P.Selvi, learned Government Advocate who takes notice on behalf of the respondents.
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 is made against the impugned assessment order dated 09.01.2025 passed by the first respondent.
4. The learned counsel for the petitioner would submit that, in the present case, DRC 01 and personal hearing notices were issued to the petitioner and the same were uploaded in the column of “Additional Notices and Orders” in GST Portal. Due to non-uploading of the Notices and Orders in the regular “Notices and Orders” tab in the portal, the petitioner was not aware of the same, hence, the petitioner did not file his reply and appear for personal hearing, however, without hearing him, the impugned order came to be passed. Hence, the learned counsel would submit that, the impugned order suffers from violation of principles of natural justice, hence, it is liable to be set aside.
5. Further, the learned counsel would submit that, the petitioner is ready and willing to deposit 25% of the disputed tax, 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 respondents would submit that, in the present case, the impugned notices and orders were duly uploaded in the e-portal, but the petitioner did not appear before the respondent on two personal hearings. However, the Learned Government Advocate would fairly submit that, since the petitioner has voluntarily come forward to deposit 25% of the disputed tax, the prayer sought for by the petitioner may be considered.
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, DRC 01 was issued on 26.11.2024 and two personal hearing notices were issued on 19.12.2024 and 03.01.2025 respectively. All the notices were uploaded only in the e-portal and none of the notices were served through RPAD.
9. This Court is of the considered opinion that, when an exparte order was passed, the respondent should have sent atleast one reminder notice through RPAD or by way of any other mode as specified under Section 169 of the Act. So that, the petitioner can able to file his reply or participate in the proceedings. In the present case, no notice was served by the respondent through RPAD and all the notices were uploaded only in the e-portal. However, since the petitioner, themselves, have voluntarily come forward to deposit 25% of the disputed tax, to which, the Learned Government Advocate is also agreeable, this Court is inclined to pass/issue the following orders/directions:-
i) The impugned order dated 09.01.2025 passed by the 1st respondent is set aside.
ii) Consequently, the matter is remanded to the 1st respondent for fresh consideration.
iii) The petitioner is granted liberty to deposit 25% of the disputed tax, which the petitioner themselves have voluntarily come forward to make such payment, 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 a reply along with supportive documents within a period of two weeks, and
v) Thereupon, the respondent shall consider the reply and shall issue a clear 14 days notice affording an opportunity of personal hearing
10. In the result, this Writ Petition is allowed on the aforesaid terms. Consequently, connected miscellaneous petitions are closed. No costs.