Portal Service is Valid but Not Always "Effective": Madras High Court Orders Remand

Portal Service is Valid but Not Always “Effective”: Madras High Court Orders Remand

The Legal Issue

Whether serving a Show Cause Notice (SCN) and subsequent orders solely by uploading them to the GST portal satisfies the principles of Natural Justice, especially when the taxpayer fails to respond and is subjected to an ex parte assessment.

Facts of the Case (Madras High Court, 2026)

The Notification: The GST department issued an SCN and several reminders by uploading them exclusively to the “View Additional Notices” tab on the GST portal.
The Default: The petitioner claimed they were unaware of these uploads, leading to a total lack of response. Consequently, the Assessing Officer passed an ex parte assessment order confirming the tax demand without a personal hearing.
The Appeal: The petitioner’s subsequent appeal was rejected by the Appellate Authority on the grounds of limitation (delay in filing).
Petitioner’s Argument: Relying on Section 169, the petitioner argued that while portal upload is a mode of service, it is not “effective” if it doesn’t result in actual communication, thereby breaching the right to be heard.

The Decision

The High Court (Justice Krishnan Ramasamy) set aside the orders and remanded the matter, establishing crucial procedural safeguards:

Portal Service is “Sufficient” but not “Absolute”: The Court acknowledged that under Section 169(1)(d), uploading to the portal is a valid mode of service. However, it should not be treated as a mere “empty formality.”
Duty to Use Alternative Modes: If a taxpayer does not respond to portal notices, the Assessing Officer must explore alternative modes prescribed in Section 169—specifically Registered Post with Acknowledgement Due (RPAD)—to ensure the taxpayer is actually informed.
Natural Justice Violation: Passing a heavy tax demand ex parte without ensuring the notice was seen or granting a personal hearing vitiates the entire proceeding.
Conditional Remand: The Court set aside the assessment and appellate orders on the condition that the petitioner deposits 25% of the disputed tax within four weeks.
Outcome: In favour of the assessee / Matter Remanded.

Key Takeaways for Taxpayers

“View Additional Notices” Tab: Many notices are hidden in the “Additional Notices” sub-menu rather than the main “Notices and Orders” tab. Taxpayers must check both regularly.
RPAD as a Right: If the department passes an order against you without sending a physical copy (especially if you didn’t reply online), this ruling serves as a strong precedent for a Writ Petition.
The 25% Deposit Rule: While the Court may set aside an unfair order, they often require a partial deposit (usually 10% to 25%) to ensure the taxpayer is serious about contesting the case on merits.

HIGH COURT OF MADRAS

V.S.Muruganandam

Deputy State Tax Officer -II^*

Krishnan Ramasamy, J.

W.P. (MD) No. 851 of 2026
W.M.P. (MD) Nos. 694 & 696 of 2026
[Assessment year 2020-21]

JANUARY 19, 2026

N.Sudalai Muthu for the Petitioner. R.Suresh Kumar, Addl. Govt. Pleader for the Respondent.

ORDER

1. This writ petition has been filed challenging the impugned order dated 05.02.2025 passed by the 1^st respondent and the consequential rejection of appeal vide proceedings dated 08.04.2025 passed by the 2^nd respondent.

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

3. By consent of the parties, the main writ petition is taken up for final 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. As against the said order, the petitioner has filed an appeal before the 2^nd respondent. However, the said appeal was rejected on the ground that there is a delay in submission of appeal. Challenging the order of the 1^st respondent and the consequential order of the 2^nd respondent, the petitioner has filed this Writ Petition.

5. Further, he would submit that now, the petitioner is willing to pay 25% of the disputed tax amount, to the respondents. Hence, he requests this Court to grant an opportunity to the petitioner to present their case before the respondents by setting aside the impugned order.

6. On the other hand, the learned Additional Government Pleader appearing for the respondents would submit that the respondents had uploaded the notices in the GST Online Portal. But the petitioner failed to avail the said opportunity. Further, he has fairly admitted that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Therefore, he requested this Court to remit the matter back to the respondent, subject to the payment of 25% of the disputed tax amount as agreed by the petitioner.

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

8. In the case on hand, it is evident that the show cause notice was uploaded on the GST Portal Tab. According to the petitioner, he was not aware of the issuance of the said show cause notice issued through the GST Portal and the original of the said show cause notice was not furnished to them. 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.

9. No doubt, sending notice by uploading in portal is a sufficient service, but, the Officer who is sending the repeated reminders, inspite 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.

10. Thus, when there is no response from the tax payer to the notice sent through a particular mode, the Officer who is issuing notices should strictly explore the possibilities of sending notices through some other mode as prescribed in Section 169(1) of the Act, preferably by way of RPAD, which would ultimately achieve the object of the GST Act. Therefore, this Court finds that there is a lack of opportunities being provided to serve the notices/orders etc., effectively to the petitioner.

11. Further, it was submitted by the learned counsel for the petitioner that now, the petitioner is willing to pay 25% of the disputed tax amount to the respondent. In such view of the matter, this Court is inclined to set aside the impugned order dated 05.02.2025 passed by the 1^st respondent and the consequential order of rejection of appeal passed by the 2nd respondent dated 08.04.2025. Accordingly, this Court passes the following order:-

(i)

The impugned order dated 05.02.2025 passed by the 1^st respondent and the consequential rejection of appeal passed by the 2^nd respondent dated 08.04.2025 are set aside and the matter is remanded to the respondents for fresh consideration on condition that the petitioner shall pay 25% of the disputed tax amount to the respondent, as agreed, within a period of two weeks from the date of receipt of a copy of this order. The setting aside of the impugned orders will take effect from the date of payment of the said amount.

(ii)

In the event if any amount is collected after passing of the impugned order, the petitioner is certainly entitled to make appropriate deduction while paying 25% of the disputed tax as ordered by this Court.

(iii)

The petitioner shall file their reply/objection along with the required documents, if any, within a period of three weeks from the date of payment of amount as stated above.

(iv)

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.

(v)

Upon production of proof of payment of 25% of the disputed tax amount as ordered by this Court, the concerned bank is directed to defreeze the back account and permit the petitioner to operate his bank account.

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