An Assessment Order Based on an Ante-Dated Service of Notice and Without a Personal Hearing Is Legally Invalid

Issue

Whether an assessment order is sustainable when there is a documented discrepancy in the date of service of the Show Cause Notice (SCN) and where the mandatory requirement of a personal hearing under Section 75(4) was not met.

Facts

The Challenge: The petitioner filed a writ challenging a GST assessment order dated 13.02.2025.
Petitioner’s Claim: They argued that all communications were merely uploaded to the portal (not seen), resulting in no reply being filed and no personal hearing being attended.
Recovery Status: Notably, 80% of the disputed tax had already been recovered by the Department.
Revenue’s Defense: The Department claimed that the SCN (DRC-01) dated 25.11.2024 was served physically and that the petitioner simply failed to respond.
The Discrepancy: The assessment order recorded that the notice dated 25.11.2024 was actually served on 23.11.2024. The postal acknowledgment also confirmed receipt on 23.11.2024—two days before the notice was officially issued.

Decision

Improper Service: The Court noted the logical impossibility of a notice being served (23.11.2024) before it was issued (25.11.2024). This discrepancy evidenced a lack of effective and valid service.
Violation of Natural Justice: Since the petitioner was unaware of the SCN, they were deprived of the opportunity to file a rebuttal.
Mandatory Hearing: The Court reaffirmed that under Section 75(4), a personal hearing is mandatory where an adverse decision is contemplated. Passing an assessment order without such a hearing is a jurisdictional error.
Remand with Protection: Considering that the Department had already recovered 80% of the tax (far exceeding the usual 10% pre-deposit requirement), the Court set aside the order and remanded the matter.
Direction: The AO must provide a fresh opportunity for a reply and conduct a personal hearing before passing a new order. [Matter remanded]

Key Takeaways

The “Ante-Dated” Trap: If the Department’s records show service occurring before the date of the notice, the service is legally “vitiated” (invalid), providing strong grounds to quash the order.
Section 75(4) is Absolute: Even if a taxpayer does not request a hearing, the Department must grant one if they intend to raise a tax demand or impose a penalty.
Recovery as a Buffer: If the Department has already recovered a substantial portion of the tax through bank attachments or other means, Courts are more inclined to remand the matter for a fair trial on merits rather than keeping the recovery stayed.

HIGH COURT OF MADRAS

Sakthimurugan Crusher

Commercial Tax Officer/State Tax Officer^*

Krishnan Ramasamy, J.

W.P.(MD) No. 3241 of 2026
W.M.P(MD) No. 2669 of 2026

FEBRUARY 9, 2026

Sudalai Muthu N. for the Petitioner. R.Suresh Kumar, AGP for the Respondent.

ORDER

1. This writ petition has been filed challenging the impugned order dated 13.02.2025 passed by the respondent.

2. Mr.R.Suresh Kumar, learned Additional Government Pleader, takes notice on behalf of the respondent.

3. By consent of the parties, the main writ petition is taken up for disposal at the admission stage itself.

4. The learned counsel for the petitioner would submit that in this case, all notices/communications were uploaded by the respondent in the GST common portal. Since the petitioner was not aware of the said notices, they failed to file their reply within the time. Under these circumstances, the impugned order came to be passed by the respondent without providing any opportunity of personal hearing to the petitioner. Therefore, this petition has been filed.

5. Further, he would submit that the respondent has already recovered 80% of the disputed tax amount from the petitioner. Hence, he requests this Court to grant an opportunity to the petitioner to present their case before the respondent by setting aside the impugned order.

6. On the other hand, the learned Additional Government Pleader appearing for the respondent would submit that notice dated 25.11.2024 was sent through physical mode of service. But the petitioner failed to avail the said opportunity. Hence, he requests this Court to pass appropriate orders.

7. Heard the learned counsel for the petitioner and and the learned Additional Government Pleader for the respondent and also perused the materials available on record.

8. In the case on hand, it was contended by the respondent that the show cause notice in DRC-01 dated 25.11.2024 was served physically to the petitioner. However, upon perusal of acknowledgment of postal department, it is clear that the said notice was received on 23.11.2024, which is 2 days prior to the date of issuance of said notice. Even in the assessment order, it has been stated that the notice dated 25.11.2024 was served to the petitioner on 23.11.2024. In such case, it is clear that there is some discrepancies in issuance of the notice, due to which, the petitioner was not aware of the issuance of the said show cause notice. In such circumstances, this Court is of the view that the impugned assessment order came to be passed without affording any opportunity of personal hearing to the petitioner, confirming the proposals contained in the show cause notice. Therefore, this Court finds that there is a lack of opportunities being provided to serve the notices/orders etc., effectively to the petitioner.

9. Further, it was submitted by the learned counsel for the petitioner that the respondent has already recovered 80% of the disputed tax amount from the petitioner. In such view of the matter, this Court is inclined to set aside the impugned order dated 13.02.2025 passed by the respondent. Accordingly, this Court passes the following order:-

(i)

The impugned order dated 13.02.2025 is set aside and the matter is remanded to the respondent for fresh consideration.

(ii)

The petitioner shall file their reply/objection along with the required documents, if any, within a period of three weeks from the date of receipt of a copy of this order.

(iii)

On filing of such reply/objection by the petitioner, the respondent shall consider the same and issue a 14 days clear notice, by fixing the date of personal hearing, to the petitioner and thereafter, pass appropriate orders on merits and in accordance with law, after hearing the petitioner, as expeditiously as possible.

(iv)

Considering the fact that the impugned order itself has been set aside, this Court is of the opinion that the attachment made on the bank account of the petitioner cannot survive any longer and hence, it is to be lifted. As a sequel, the respondents are directed to release the attachment, and instruct the concerned bank to de-freeze the bank account of the petitioner, immediately upon the production of a copy of this order.

10. With the above directions, this writ petition is disposed of. No costs. Consequently, the connected miscellaneous petition is also closed.