GST Order Cancelled as Notice Not Properly Served: High Court

1. Background of the Case

Shamlal Enterprises received a GST tax order from the Deputy State Tax Officer, Hasthampatty Circle, Salem.

The order was directly uploaded on the GST portal.

The petitioner (Shamlal Enterprises) claimed they were unaware of the notice and therefore missed the chance to respond.

2. Petitioner’s Argument

The petitioner’s lawyer explained that:

All communications, including the show cause notice, were only visible under the “View Additional Notices and Orders” section on the portal.

No physical notice was ever sent to them (by post or hand).

Due to this, they couldn’t file a reply or attend a hearing, and the tax officer passed the final order without giving them a chance to explain.

The petitioner was willing to pay 25% of the disputed tax amount if a new opportunity was granted.

3. Court’s Observation (Madras High Court)

The High Court acknowledged that:

The notice was only uploaded on the GST portal, and no follow-up method was used to confirm the taxpayer saw it.

As per Section 169(1) of the CGST Act, the officer should have also used other acceptable methods like Registered Post Acknowledgment Due (RPAD).

Simply uploading a notice is not sufficient, especially when the taxpayer hasn’t replied.

The officer should have used their judgment and tried alternative methods to ensure effective service of notice.

4. Criticism of the Tax Officer’s Action

The Court stated that:

Ignoring responses and blindly proceeding to pass an order wastes time not only for the taxpayer, but also for the Appellate Authority and the court.

Proper service of notice is a basic legal requirement, and bypassing it makes the whole process unjust and unlawful.

5. Final Decision by the Madras High Court

The Court set aside (cancelled) the tax officer’s order.

It gave Shamlal Enterprises a fresh chance, but with certain conditions:

Conditions:

The petitioner must pay 25% of the disputed tax amount within 4 weeks.

After payment, the petitioner has to submit their reply with necessary documents within 3 weeks.

The tax officer must issue a 14-day advance notice for a personal hearing.

A new order must be passed after properly hearing both sides and considering the facts.