Tvl. Fashion Falls Fabrics Vs Assistant Commissioner (ST)
Date: June 5, 2025
Subject Matter
Officers Must Explore Alternate Notice Means After No Portal Response
Summary
This writ petition challenged an ex parte order (DRC-07 dated February 17, 2025) for the Assessment Year 2020-2021. The petitioner claimed unawareness of the order until receiving a recovery intimation notice on March 24, 2025. Although the summary show cause notice (DRC-01) and subsequent reminders were uploaded to the GST common portal, and three personal hearings were granted, the petitioner neither replied nor appeared. The petitioner attributed this to their consultant's failure, stemming from their own limited knowledge of operating the portal.
The petitioner's counsel offered to deposit 10% of the disputed tax and requested that the ex parte order be set aside and the matter be remanded for fresh consideration. The learned Government Advocate (Tax) for the respondent concurred, agreeing to set aside the order subject to the 10% payment.
The High Court acknowledged that while portal upload constitutes sufficient service, the officer, upon receiving no response to repeated reminders, should have explored alternative modes of communication, particularly by Registered Post Acknowledgment Due (RPAD) as permitted by Section 169 of the GST Act. The court emphasized that merely fulfilling "empty formalities" of portal service without ensuring effective communication leads to multiplicity of litigation and wastes judicial time. It reiterated its stance in numerous previous cases that if no reply is received via one mode, an alternative mode of notice should be utilized.
Ruling: The High Court set aside the impugned ex parte order dated February 17, 2025, on the condition that the petitioner pays 10% of the disputed tax within four weeks. Upon this payment, the matter is remanded back to the respondent for fresh consideration. The petitioner is directed to file a reply with supporting documents within two weeks thereafter. The respondent is then mandated to issue a clear 14-day notice for a personal hearing and decide the matter in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Challenging the impugned Proceedings in DRC-07, dated 17.02.2025 for the Assessment years 2020-2021, the present Writ Petition is filed by the petitioner.
2. Mrs. K. Vasanthamala, learned Government Advocate (Tax), takes notice on behalf of the respondent. By consent of both parties, the main Writ Petition is taken up for disposal at the time of admission stage itself.
3. The impugned order is an exparte order. According to the petitioner, the petitioner came to be aware of the impugned order, dated 17.02.2025 only when he received the Intimation notice on 24.03.2025 with regard to the recovery. The petitioner has been served with a summary of the show cause notice DRC-01 on 25.11.2024 with an attachment of DRC-01. This was followed by three reminders and thereafter the impugned order DRC-07, dated 17.02.2025 was issued. All the above communications have also been issued to the petitioner through GST common portal. Thereafter, three personal hearings were also granted to the petitioner.
However the petitioner neither sent a reply nor appeared in person before the respondent. According to the petitioner, he has a limited knowledge in operating the portal, they engaged a consultant and entrusted him with regard to the follow up activities of the portal. However, his consultant is failed to do so.
4. The learned counsel for the petitioner would submit that he is ready to deposit 10% of disputed tax and prayed for setting aside the impugned order and remit the matter back for fresh consideration.
5. The learned Government Advocate (Tax) appearing for the respondent would submit that the impugned order is an exparte order and the same may be set aside subject to the payment of 10% of the disputed tax amount.
6. Admittedly the impugned order was passed exparte. Though the petitioner has issued with DRC proceedings and thereafter three personal hearings through web portal, he is unaware of the same. Had they been issued at least one reminder notice through alternative mode preferably by RPAD, the issue of passing of exparte order would not have been arisen. This Court in number of cases held that in the event of issuing notice in respect of no reply was received, the respondent is bound to issue notice by way of any one of the alternative modes preferably by way of RPAD, otherwise the entire exercise of passing the assessment order is a vexatious one.
7. 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.
8. It was further submitted that the petitioner is ready and willing to pay 10% 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.
9. 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 only wasting the time of the Officer concerned, but also the precious time of the Appellate Authority/Tribunal and this Court as well. Thus, when there is no 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.
10. Therefore, this Court is inclined to set-aside the impugned order with terms, by issuing the following directions:-
i. The impugned order dated 17.02.2025 passed by the respondent is set aside subject to the payment of 10% of the dispute tax by the petitioner within a period of four weeks from the date of receipt of a copy of this order.
ii. On such payment being made by the petitioner, the matter is remanded back to the respondent for fresh consideration.
iii. The petitioner is directed to file a reply along with supportive documents, if any, within two weeks thereafter.
iv. 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.
11. With the above directions, this Writ Petition is disposed of. No costs. Consequently, connected Miscellaneous Petitions are closed.