Madras High Court Quashes Ex Parte GST Order for Violation of Natural Justice

The petitioner, filed a writ petition challenging an order dated April 30, 2024, issued by the third respondent (State Tax Officer, Tiruppur) for the Assessment Year (AY) 2018-19. The petitioner contended that the show cause notice, dated December 22, 2023, was uploaded to the GST portal, but a physical copy was not served, leading to his unawareness and inability to reply. Consequently, the third respondent passed the impugned order without hearing the petitioner, which he argued violated principles of natural justice.

The petitioner expressed readiness to deposit 25% of the disputed tax if the order was set aside and the matter remanded and requested the lifting of the property attachment upon such payment. The government advocate, speaking on behalf of the respondents, agreed that the petitioner’s prayer could be taken into consideration because he voluntarily offered to deposit 25% of the contested tax and agreed to a rehearing of the writ petition at the admission stage.

Madras High Court’s Decision: The High Court set aside the impugned order dated April 30, 2024, recognizing that although portal uploads constitute service, officers should investigate alternative communication channels, such as RPAD, if no response is received, to ensure effective service and prevent additional litigation. The court revoked the contested order after concluding that the petitioner had not been given a sufficient opportunity to reply.

The Hon’ble Court remanded the matter back to the third respondent for fresh consideration. The petitioner is required to deposit 25% of the disputed tax within two weeks of receiving the order. Subsequently, the petitioner must file a reply with supporting documents within two weeks of making the deposit. The third respondent is then directed to issue a 14-day notice for a personal hearing and decide the matter as per the law. Thus, upon providing proof of the 25% tax payment, the second respondent is instructed to immediately lift the attachment notice on the petitioner’s property.

The writ petition was disposed of accordingly, and the connected miscellaneous petitions were closed.

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