HC quashes Ex-Parte Order and directs the department to ensure proper service of notice through various modes in order to ensure that the object of Section 169 is fulfilled

The Hon’ble Madras High Court in M/s. Namasivaya Auto Parts Versus The Deputy State Tax Officer I Korattur Assessment Circle, Chennai - 2025 (6) TMI 2027 - MADRAS HIGH COURT set aside the ex-parte order dated December 27, 2023 (“Impugned Order”) passed against the Petitioner on the ground that the show cause notices (“SCN”) along with the reminder notices were served only by uploading on the GST portal do not amount to effective service, especially where no further steps were taken by the officer despite the Petitioner being non-responsive.

Facts:

Namasivaya Auto Parts ('the Petitioner') challenged the Impugned Order passed by the Deputy State Tax Officer I ('the Respondent') for the assessment year 2017–18.

The Respondent issued an intimation in Form DRC-01A on August 28, 2023 and a SCN in Form DRC-01 on September 15, 2023 via the GST common portal. The Petitioner did not respond to the notice nor avail the opportunity for personal hearing despite reminder notices being sent by the Respondent, leading to the confirmation of the proposed demand.

The Petitioner contended that neither the SCN nor the Impugned Order were served physically or by registered post, and that uploading of the same on the portal under the 'Additional Notices and Orders' tab did not bring the proceedings to their attention.

Issue:

Whether service of notices solely through the GST portal without resorting to other valid modes under Section 169 of the GST Act constitutes effective service of Notice?

Held:

The Hon’ble Madras High Court in M/s. Namasivaya Auto Parts Versus The Deputy State Tax Officer I Korattur Assessment Circle, Chennai - 2025 (6) TMI 2027 - MADRAS HIGH COURT, held as under:

• Observed that, although uploading notices on the GST portal constitutes a valid mode of service under Section 169 of the CGST Act, this alone may not amount to effective service when the taxpayer fails to respond.
• Noted that, the Respondent had issued multiple reminders but failed to explore other statutorily prescribed service methods, such as RPAD, despite continued non-response by the Petitioner.
• Held that, when no reply is received to notices served via a particular mode, it is incumbent upon the officer to take additional steps to ensure effective service. Fulfilling procedural formalities without ensuring that the taxpayer has actual knowledge of the notice defeats the purpose of adjudication and leads to avoidable litigation.
• Set aside the Impugned order dated December 27, 2023 and remanded the matter back to the Respondent for fresh consideration and directed the Petitioner to deposit 25% of the disputed tax amount as a precondition for remand.

 (Author can be reached at [email protected])