Madras High Court: GST Portal Notices Insufficient for Service, Grants Relief to Assessee

The Madras High Court ruled that uploading notices only on the GST portal is not sufficient service while granting relief to a taxpayer who was unaware of the proceedings against him.

The applicant Chokalingam Srinivasan, was running a business of undertaking works contract services and was registered under the Goods and Services Tax Act, 2017(GST Act, 2017). For the 2018-19 tax year, the applicant submitted their tax filings and paid the demanded taxes.

However, an audit of these filings uncovered some discrepancies between GSTR-3B and Form 26AS of the Income Tax; Form GSTR-3B and GSTR9/9C, and proceedings were initiated against the applicant u/s 61 of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act, 2017).

S.Ramanan representative of the applicant claimed that the notices and the orders were not provided via registered post or personal delivery. Instead the same were uploaded on the GST portal which makes the applicant unaware of the proceedings. Consequently, the applicant cannot take part in the adjudication procedure. It was claimed by the applicant that if provided a chance then they shall be able to elaborate the alleged discrepancies.

The counsel of the applicant laid on a ruling in M/s. K. Balakrishnan, Balu Cables v. Assistant Commissioner of GST & Central Excise (2024) where the court remanded the case under identical circumstances, subject to the payment of 25% of the disputed taxes.

The applicant pointed out the fact that the recovery proceedings had been initiated before, which led to the attachment of their bank account. Provided these situations, the applicant specified willingness to deposit 25% of the disputed tax and asked for one final chance to showcase their objections before the adjudicating authority.

The government counsel, K. Vasanthamala, appearing for the respondents, did not present any serious objection to this request.

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By conditionally setting aside the order, based on mutual consent The court, presided over by Justice Mohammed Shaffiq, resolved the dispute. The court asked the applicant to deposit 25% of the disputed taxes within 4 weeks of getting the order, with any prior payments being credited.

It was asked to the tax department to validate the payments and notify the taxpayer about any left balance. It was mentioned by the court that the failure to adhere shall directed to the restoration of the assessment order. On compliance, the withdrawal of the bank account attachment and garnishee proceedings was obligated.

Also, the court deemed the impugned order as a show cause notice and needed the taxpayer to file objections within 4 weeks. In the case of filing the objections, the tax authority was directed to acknowledge them and grant a fair hearing before passing a fresh order. The court through these directions disposed of the petition.