The Madras High Court has clarified that mere upload of GST notices on the online portal does not satisfy the constitutional mandate of fair hearing when taxpayers remain unaware. The judgment underscores that procedural compliance must be meaningful, not formalistic, and that officers have a duty to ensure actual notice through alternative modes prescribed under law.
Background & Facts
The Dispute
Venus Traders, a small business entity, was issued a show cause notice under the Goods and Services Tax Act, 2017, alleging tax evasion. The notice was uploaded only on the GST common portal, with no physical copy dispatched or service effected through any other mode. The petitioner claimed no knowledge of the notice, resulting in no reply being filed.
Procedural History
- The 1st respondent, Assistant Commissioner (ST), passed an ex parte assessment order on 09.07.2025 based on the unchallenged proposals in the show cause notice.
- No personal hearing was afforded to the petitioner prior to the order.
- The petitioner filed a writ petition under Article 226 challenging the order as violative of natural justice.
- The respondents conceded that no personal hearing was provided and that the notice was served solely via the portal.
Relief Sought
The petitioner sought quashing of the impugned order and direction to unblock the Electronic Credit Ledger (ECL). Alternatively, they offered to deposit 25% of the disputed tax amount in exchange for a fresh opportunity to be heard.
The Legal Issue
The central question was whether service of a GST show cause notice solely through the online portal, without any attempt at alternative modes under Section 169 of the GST Act, constitutes effective service when the recipient claims no awareness, and whether such service satisfies the requirements of natural justice.
Arguments Presented
For the Petitioner
The petitioner’s counsel argued that uploading a notice on the portal is insufficient if the taxpayer is unaware of it, especially for small businesses with limited digital literacy. Reliance was placed on the principle that natural justice requires actual notice, not just technical compliance. The counsel emphasized that Section 169 provides multiple modes of service - including registered post, courier, and personal delivery - and that failure to use any of these when portal service fails renders the notice ineffective.
For the Respondent
The Additional Government Pleader conceded that no personal hearing was granted and that the notice was uploaded only on the portal. However, the respondent argued that portal service is legally valid under the GST Act and that the onus was on the taxpayer to monitor the portal. The respondent did not dispute the petitioner’s claim of unawareness but maintained that the procedural requirement was technically fulfilled.
The Court's Analysis
The Court rejected the notion that portal service alone suffices when there is no evidence of actual receipt. It held that while uploading notices on the GST portal is a valid mode of service, it cannot be the exclusive or default method, particularly when no response is received. The Court emphasized that Section 169(1) of the GST Act prescribes multiple modes of service, including registered post with acknowledgment due (RPAD), courier, and personal delivery, and that officers must exercise discretion to use these alternatives when portal service appears ineffective.
"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."
The Court observed that the officer’s failure to explore RPAD or other statutory modes amounted to a violation of audi alteram partem. The judgment stressed that procedural fairness is not a technicality but a constitutional imperative, and that administrative efficiency cannot override the right to be heard. The Court further noted that the petitioner’s willingness to deposit 25% of the disputed tax demonstrated bona fides and warranted a fresh opportunity.
The Verdict
The petitioner succeeded. The Court set aside the impugned order and remanded the matter for fresh adjudication, subject to the petitioner depositing 25% of the disputed tax. The Court directed the revenue authority to issue a fresh 14-day notice with a fixed date for personal hearing before passing a final order.
What This Means For Similar Cases
Notice by Portal Alone Is Insufficient
- Practitioners must now challenge ex parte GST orders where notice was served only via the portal and no alternative mode under Section 169 was attempted.
- Taxpayers can invoke this judgment to argue that lack of actual notice vitiates the entire proceeding, regardless of technical compliance.
Officers Must Proactively Use Section 169 Modes
- GST officers must document attempts to serve notices via RPAD or courier if portal notices remain unacknowledged.
- Failure to do so may result in quashing of orders on appeal or writ, even if the underlying tax demand is valid.
Deposit of 25% Can Be a Gateway to Hearing
- The Court’s acceptance of the 25% deposit as a condition for remand sets a precedent for pragmatic resolution.
- Practitioners should consider offering partial payment in writ petitions to strengthen the case for remand, especially where the taxpayer is cooperative.
ECL Blocking Not Automatically Invalidated
- The Court declined to interfere with the ECL block, indicating that financial restrictions may remain pending outcome of fresh proceedings.
- This signals that while procedural rights are protected, revenue authorities retain discretion over financial controls unless proven arbitrary.
