TaxTMI 
TaxTMI 
TaxTMI 
The purpose of writing this series is to see some reduction in bad orders which are wasting the precious time of GSTAT as well as all jurisdictional high courts. It may be noted that in almost all cases the high courts in India pass very reasoned orders and whenever the department approaches the Supreme Court by way of special leave petition or civil appeals, in almost all cases, it is bound to be dismissed on the ground that there are no reasons to interfere.
The ground reality is far behind the above objective and even a deputy state tax officer is not bothered to pass orders without application of mind as observed by the High Court. It is really a very bad story which requires wide publicity. In my view, the concerned Deputy State Tax Officer attached to Lalgudi Circle deserves a training program till such time he starts passing orders which stand before GSTAT and the appeal, if any, by the taxpayer filed against the order of DSTO, Lalgudi is dismissed by the Tribunal or any other competent court.
This write up is based on the order of the High court of Madras dated 16/02/2026 in WP (MD) 3155 of 2026 in the matter of M/s. Swan Enterprises Versus Deputy State Tax Officer – 2, Lalgudi - 2026 (3) TMI 140 - MADRAS HIGH COURT. This order is a harassment on the taxpayer not just on one ground but on several grounds which are discussed one by one.
In the first place, the taxpayer was in receipt of an adjudication order dated 25/02/2025 pertaining to the financial year 2020-21 and the order was passed invoking Section 74. The taxpayer was aggrieved and filed an appeal against that order by making the required pre deposit. In case the DSTO finds some omissions in the adjudication order dated 25/02/2025, he should issue a fresh SCN for the same financial year within the time limit available for issuing SCN by covering only the omissions. The SCN must be effectively communicated to the taxpayer by a or b or c or d or e of sub-section 1 of section 169 and the DSTO must ensure that if one mode does not attract the attention of the taxpayer, he must use the other modes. The section is well drafted by the legislature in such a manner that adapt method a and in case it does not work go for b. In case a and b does not work, try c. In case a, b, c does not work together, go for d. d is the mode prescribed for uploading the SCN in portal. The officers only see their convenience and the easiest mode is d and hence they always go for uploading in portal only. Surprisingly, the DSTO passed another ex party order in violation of section 75(4) on 19/09/2025 for the very same financial year 2020-21 and that too by covering old issues as well which are already adjudicated.
In the second place, he is not bothered about his wrong doings and went on to attach the bank account of the taxpayer as the second adjudication order which was only posted in the portal missed the attention of the taxpayer.
Left with no options, the taxpayer approached the High Court by way of writ under Article 226. The observations of the high court in para 8 are vital which need huge publicity amongst all tax officers who resort to pass duplicate orders. The relevant extract reads as 'in spite 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'.
The court simply set aside the second order dated 19/09/2025 and also instructed the bank to defreeze the account once 10% pre deposit against the second order is made.
The DSTO, Lalgudi has not understood any of the requirements of Sections 75 as well as 169 even after hundreds of high court orders and various write ups on the issue on hand.
My only question is the order was passed without imposing any cost on the DSTO who has not understood the requirements of Section 75 as well as Section 169 and in case this trend continues, how to make the erring tax official responsible for the errors. In my personal view, suitable training programs may bring some improvement in the quality of the adjudication orders.
This write us is not against any particular officer but has only one objective in mind which is why should not we stop orders being passed without application of mind.
It was suggested in my earlier articles to increase the threshold exemption on services as well as goods with effect from 01/04/2027 so as to reduce the workload of tax officials who presently do not have time to apply mind. In the instant case, there were several show cause notices which were raised automatically by the system based on various GSTR filed by the taxpayer. However, the tax officer was bound to pass orders well within the prescribed time limit as otherwise the orders, even if passed after the deadline prescribed become invalid. This pressure on work could be on e of the reasons for such bad order.
It is appealed to all concerned that officers at the first level who pass adjudication orders whose orders are being set aside later by the court may be sent for suitable training.