Case Summary
Case Title: Tvl. Sri Mathuru Eswarar Traders v. Deputy State Tax Officer
Court: High Court of Judicature at Madras
Petition No.: WP No. 16787 of 2025
Judgment Date: 08-05-2025
Coram: Justice N. Mala
Parties:
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Petitioner: Tvl. Sri Mathuru Eswarar Traders, represented by its Proprietor Mr. R. Mahalingam
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Respondent: Deputy State Tax Officer-I, Udumalpet South Assessment Circle, Thiruppur
Category of Dispute: Input Tax Credit – denial based on purchases from alleged non-existent dealer
Relevant Provisions: Section 169 of the CGST Act, 2017 (modes of service of notice), principles of natural justice
Facts (Paras 2–4)
The petitioner, a commission agent in cotton ginning and a registered GST taxpayer, was issued a show cause notice dated 16.09.2024 alleging wrongful availment of ITC from a non-existent dealer. The notice demanded tax of ₹9,67,531 with penalty and interest. The notice was uploaded only on the GST portal, which the petitioner claims went unnoticed, and hence no reply was filed. Consequently, the department passed the assessment order on 30.12.2024, confirming the demand and attaching the petitioner’s bank account.
The petitioner challenged the order as being passed without personal hearing and argued that mere uploading of notice cannot constitute effective service. He volunteered to deposit 25% of the disputed tax if the matter was remanded.
Observations (Paras 6–7)
The Court held that:
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Mere uploading of notice on the GST portal cannot be treated as effective service, especially when there is no response from the taxpayer.
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Officers are expected to exercise due diligence by using other statutory modes of service under Section 169, such as RPAD.
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Repeatedly uploading notices without ensuring receipt by the taxpayer amounts to mechanical compliance, which violates principles of natural justice and leads to unnecessary litigation.
Judgment (Paras 8–9)
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The assessment order dated 30.12.2024 was set aside.
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The matter was remanded back to the Assessing Officer for fresh consideration.
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The petitioner must deposit 25% of the disputed tax within two weeks.
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Upon deposit, the petitioner may file a reply with supporting documents within two weeks.
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The Officer must issue a fresh notice, grant 14 days’ time, and provide personal hearing before passing order.
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The bank account must be de-frozen once proof of 25% deposit is produced.
Table – Cases Referred
(This judgment does not cite other precedents, hence no external cases summarized here.)
Between Fine Lines (Trade Impact)
For taxpayers, this ruling underscores that notices served only by portal upload cannot always be treated as valid service. Tax officers must use alternate statutory modes like registered post to ensure actual receipt. Businesses should regularly check GST portal communications but also have legal remedy if no personal hearing is granted. Importantly, voluntary part-payment (25%) can help secure relief such as lifting of bank attachment.
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.”
