Ex parte GST Section 73 assessment set aside for failure to serve DRC-01/ASMT-10/11 notices and denying personal hearing

HC set aside the ex parte assessment order passed under Section 73 of the GST Act, finding that required notices/intimations in Form GST DRC-01/GST ASMT-10/ASMT-11 were not uploaded to the GST portal or otherwise served and no personal hearing was afforded. The court concluded the taxpayer was denied opportunity to reply and therefore could not sustain the assessment. The writ petition was disposed directing the authority to serve the claimed documents within seven days to enable filing of a proper reply.

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ISSUES PRESENTED AND CONSIDERED

1. Whether an assessment/order under Section 73 of the GST Act passed ex parte can be sustained where the taxpayer avers non-service of statutory notices/intimations on the GST portal and no personal hearing was afforded.

2. Whether administrative instructions and subsequent departmental communications (after the order) can cure defects in the original assessment order where those facts/communications do not appear on the face of the order.

3. What remedial relief is appropriate where the record indicates "no records found" for notices/intimations on the GST portal but departmental instructions assert issuance and consideration of responses?

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of ex parte assessment under Section 73 of the GST Act where statutory notices/intimations were not served on the taxpayer

Legal framework: Section 73 of the GST Act deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized. Principles of natural justice and statutory requirement of service of show-cause notices, and opportunity of personal hearing, are integral to adjudicatory proceedings under the GST scheme and relevant rules/instructions governing electronic service on the GST portal.

Precedent treatment: The Court relied on settled administrative-law principles that ex parte orders are unsustainable where procedural fairness (service and opportunity to be heard) is not afforded; no specific case law was cited in the judgment, the Tribunal/Court applied trite principles of natural justice.

Interpretation and reasoning: The record (Annexure-4 screenshot) showed "no records found" in the intimations/notices tab on the GST portal. The assessment order on its face refers to an earlier ASMT-10 dated 20/07/2021 and notes non-reply, but does not record the later ASMT-10 (30/03/2022) and ASMT-11 (01/06/2022) relied on in departmental instructions. The Court emphasized that absence of portal upload/communication and absence of personal hearing on the record point to denial of opportunity. The Court further held that additional departmental instructions placed before it, which post-date or explain the impugned order, cannot supplement or validate an order defective on its face.

Ratio vs. Obiter: Ratio - An assessment passed ex parte under Section 73 where the statutory notices/intimations were not shown to have been served (portal shows "no records found") and no opportunity to be heard is recorded, is liable to be set aside; administrative or internal instructions cannot cure the defect in the original order. Obiter - Observations on the taxpayer's obligation to cooperate and not seek unnecessary adjournments are incidental to the remedial direction.

Conclusion: The ex parte assessment order was set aside for failure to demonstrate service of notices and denial of opportunity to be heard; the matter was remitted for fresh adjudication after proper service and an opportunity to reply/hear the taxpayer.

Issue 2: Whether subsequent departmental instructions/affidavits can cure omissions in the assessment order

Legal framework: Administrative law principle that an order must speak for itself and cannot be cured by post-hoc explanations or internal notes; requirements of reasoned orders and public record for service and hearing in quasi-judicial proceedings.

Precedent treatment: The Court applied the established rule that additional reasons or after-the-fact instructions cannot validate an otherwise defective order; no contrary precedent was accepted or followed.

Interpretation and reasoning: The instruction placed on record by the Department asserted issuance of ASMT-10 (30/03/2022) and consideration of the taxpayer's reply (ASMT-11 dated 01/06/2022) as unsatisfactory, leading to DRC-01 and DRC-07 orders. The assessment order itself, however, did not record these particulars and instead spoke only of an earlier ASMT-10 dated 20/07/2021. The Court held that such post-hoc narrative in instructions does not cure the absence of those facts from the impugned assessment order; "no additional reason can sanctify the original order, which is defective."

Ratio vs. Obiter: Ratio - Post-order departmental instructions or internal communications cannot be read into or used to validate an assessment order that is defective on its face for lack of service and opportunity. Obiter - The Court's acceptance that inadvertent clerical errors may have occurred in reference numbers is incidental and does not affect the core finding.

Conclusion: The departmental instructions did not rectify the defect in the impugned order; the order was set aside and remitted for fresh adjudication after proper service and hearing.

Issue 3: Appropriate remedial directions where notices appear not to have been uploaded/served on portal

Legal framework: Equitable and procedural remedies in writ jurisdiction permit quashing of orders and remittance for fresh adjudication where fundamental procedural lapses (non-service/denial of hearing) are established; directions must be specific and time-bound to ensure expeditious disposal consistent with mandate of natural justice.

Precedent treatment: The Court followed the standard remedial approach of quashing and remitting for fresh consideration with directions to serve documents and provide opportunity; no novel remedy or departure from practice was adopted.

Interpretation and reasoning: Given the petitioner's affidavit and the portal screenshot showing "no records found," and the absence of aspects of later notices in the assessment order, the Court considered it appropriate to set aside the order and direct the authority to supply the documents claimed not to have been served within seven days. Thereafter the taxpayer is to file reply within two weeks and the authority is to complete adjudication within three months, taking the reply into account. The Court imposed an obligation on the taxpayer to cooperate and avoid unnecessary adjournments.

Ratio vs. Obiter: Ratio - Where non-service on the portal and failure to afford personal hearing are established, quashal and remittance with specific timelines for service, reply, and adjudication is the appropriate remedy. Obiter - The admonition to cooperate and not seek unnecessary adjournments is supplemental guidance rather than part of the core legal holding.

Conclusion: The assessment was quashed and remitted with explicit directions: (a) serve the documents within seven days; (b) allow taxpayer two weeks to reply; (c) conclude adjudication within three months considering the reply; and (d) taxpayer to cooperate.

Cross-references and Observations

1. The Court treated Issues 1 and 2 as interlinked: absence of service on the portal (Issue 1) made the assessment order defective on its face and impervious to attempted cure by departmental instructions (Issue 2).

2. The Court applied general principles of natural justice and the rule that an order must disclose reasons and material facts relied upon; administrative notes/instructions cannot be used to add reasons after the fact.

3. Relief granted was prospective and procedural - setting aside the impugned order and mandating re-adjudication with time-bound steps - rather than a determination on the merits of the tax liability.

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