The Madras High Court has criticised the mechanical approach adopted by the tax authorities in serving GST notices and set aside an assessment order passed against a lorry service firm, citing failure to ensure effective delivery and denial of a fair hearing. The petitioner, Tvl Sakthi Murugan Lorry Service, represented by its proprietor T. Sakthi Murugan, had challenged an assessment order dated 23 April 2024 passed by the Deputy State Tax Officer-1, Villupuram-II Assessment Circle. The dispute arose from a show-cause notice issued on 27 December 2023 under Section 73 of the GST Act.

The notice, which proposed a tax demand along with penalty, had been uploaded to the GST portal but went unnoticed by the petitioner, resulting in an ex parte order confirming the demand. Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here Appearing for the petitioner, counsel submitted that no physical copy of the notice had been served, and the petitioner became aware of the proceedings only upon receipt of the final assessment order. The petitioner expressed willingness to deposit 25% of the disputed tax as a condition for setting aside the order and requested that the matter be remanded for fresh adjudication. The government advocate for the respondent fairly conceded that the petitioner’s proposal to deposit part of the tax amount could be considered for granting relief. The Court accepted this submission and proceeded to evaluate the process followed by the department in issuing the notice.

Justice N. Mala, in her order dated 8 May 2025, observed that the act of repeatedly uploading notices to the GST portal without verifying receipt by the taxpayer amounted to mechanical compliance, defeating the purpose of issuing a show-cause notice. The Court held that when a taxpayer fails to respond to notices uploaded online, the officer should have exercised due diligence by resorting to other methods of service prescribed under Section 169 of the GST Act, such as Registered Post with Acknowledgement Due (RPAD). The Court held that mere uploading of notices on the GST portal without verifying their actual receipt by the taxpayer does not constitute proper service under the GST Act.

The Court emphasised that such procedural lapses lead to unnecessary litigation and waste judicial time, and that the absence of a meaningful opportunity to reply amounted to a violation of the principles of natural justice. Accordingly, the High Court quashed the assessment order and remanded the matter for fresh consideration. The petitioner was directed to deposit 25% of the disputed tax within two weeks and thereafter submit a detailed reply. The assessing officer was instructed to provide a 14-day notice and a personal hearing before passing a fresh order in accordance with law.