Case Reference:
Tvl. Sri Vigneshwara Batteries v. Assistant Commissioner (ST), JJ Nagar Assessment Circle
High Court of Judicature at Madras | W.P. No. 34987 of 2024 | Judgment dated: 20.11.2024
Category: Input Tax Credit – Assessment Order – Natural Justice
Relevant Sections: Sections 73 & 74 of the CGST Act, 2017; Rule 142 of the CGST Rules, 2017
Facts (Para 2–3)
The petitioner, Tvl. Sri Vigneshwara Batteries, engaged in battery trading and registered under GST, filed returns and paid taxes for FY 2018–19. During scrutiny, the department observed an excess Input Tax Credit (ITC) claim beyond the eligible tax paid under Reverse Charge Mechanism. A show cause notice (SCN) in Form DRC-01 was issued on 31.10.2023, and a hearing fixed on 15.11.2023. However, as the petitioner did not file any reply or attend the hearing, the assessing officer passed the order dated 12.01.2024 confirming the proposed demand.
The petitioner contended that the notice and orders were uploaded only under the “View Additional Notices and Orders” tab on the GST portal, and no separate communication or alert was given, resulting in their unawareness of the proceedings.
Questions Before the Court
Whether the assessment order passed without the petitioner’s knowledge, due to improper portal communication, violates the principles of natural justice, warranting its setting aside?
Observations (Para 4–5)
The Court observed that the taxpayer’s grievance regarding lack of effective notice due to the use of the “additional notices” tab is well-founded. Citing M/s. K. Balakrishnan, Balu Cables v. Assistant Commissioner of GST & Central Excise (W.P. (MD) No.11924 of 2024, dated 10.06.2024), the Court reiterated that effective service of notice is integral to due process under Section 75(4) of the CGST Act.
The Court accepted the petitioner’s offer to deposit 25% of the disputed tax and granted a final opportunity to file objections. The State did not object to this arrangement.
Judgment (Para 5–6)
The Hon’ble Court set aside the assessment order dated 12.01.2024. It directed the petitioner to deposit 25% of the disputed tax within four weeks, after which the impugned order would be treated as a show cause notice. The petitioner shall then file detailed objections within another four weeks, and the department must pass a fresh order after granting a personal hearing. Failure to comply within the stipulated period will result in automatic restoration of the original assessment.
The writ petition was accordingly disposed of without costs.
Summary of Referred Case
| Case | Citation / Petition No. | Court & Date | Verdict Summary |
|---|---|---|---|
| M/s. K. Balakrishnan, Balu Cables v. Assistant Commissioner of GST & Central Excise | W.P.(MD) No. 11924 of 2024 | Madras High Court, 10.06.2024 | Assessment order quashed as notices uploaded only in portal without actual communication violate principles of natural justice. |
Between Fine Lines (Practical Takeaway)
The judgment reinforces that mere digital uploading of notices on the GST portal—especially under obscure tabs—does not constitute valid service under natural justice. Tax officers must ensure effective and accessible communication, while taxpayers should monitor all sections of the GST portal regularly. The decision provides a window for rectification through a conditional remand mechanism with a partial tax deposit safeguard.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”