Ex-Parte Demand Order Upheld Against Writ Challenge: Assessee Failed to Respond Despite Reminders, Appeal is the Remedy

Ex-Parte Demand Order Upheld Against Writ Challenge: Assessee Failed to Respond Despite Reminders, Appeal is the Remedy

Issue:

Whether an ex-parte demand order, where the assessee claims unawareness of the show cause notice (SCN) due to its upload on the “Additional Notices Tab” and denial of a personal hearing, can be challenged through a writ petition, especially when reminders were issued and the order itself is appealable under Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act).

Facts:

The assessee challenged an ex-parte order that raised a demand on various accounts. The assessee’s primary contention was that the show cause notice (SCN) was uploaded on the “Additional Notices Tab” of the GST portal, and therefore, it did not come to their knowledge. Additionally, the assessee claimed that the impugned order was passed without providing them a personal hearing.

However, the impugned order itself recorded that no reply was filed by the assessee and that a personal hearing was also not availed. The court found that reminders had been issued, implying that it was only after sufficient opportunities were provided that the Adjudicating Authority proceeded to pass the impugned order ex-parte.

Decision:

The court ruled in favor of the revenue. It held that since the impugned order was appealable under Section 107 of the CGST Act, the assessee should be allowed to prefer an appeal. The writ petition was not entertained, effectively upholding the ex-parte order against the writ challenge and directing the assessee to the statutory appellate remedy.

Key Takeaways:

• Availability of Alternate Remedy: This case strongly reiterates the principle that writ jurisdiction (under Article 226 of the Constitution) is an extraordinary remedy and is generally not exercised when an effective alternative statutory remedy, such as an appeal under Section 107 of the CGST Act, is available.
• Assessee’s Responsibility for Portal Access/Notifications: While portal glitches can sometimes lead to denial of natural justice (as seen in some previous cases), this judgment suggests that if reminders were issued and the authority records that sufficient opportunities were provided, the onus shifts to the assessee to prove genuine lack of knowledge or access. Simply claiming ignorance of the “Additional Notices Tab” might not be sufficient if other forms of communication or repeated reminders were sent.
• Presumption of Due Process if Opportunities Recorded: When the adjudicating authority’s order explicitly records that opportunities (like SCN and personal hearing) were provided but not availed, a higher court will generally presume that due process was followed, unless there is strong evidence to the contrary.
• Importance of Responding to SCNs: This case underscores the critical importance for assessees to actively monitor the GST portal and respond to all communications, including SCNs and hearing notices. Failure to do so, even with perceived communication issues, can lead to adverse ex-parte orders which courts may not quash under writ jurisdiction if an appeal is available.
• Limits of Writ Jurisdiction: Writ courts are generally reluctant to interfere with the factual findings of lower authorities or to substitute the detailed appellate process for summary writ proceedings, especially when the assessee has arguably not exhausted their primary opportunities.