In a significant ruling, the Madras High Court has set aside an assessment order issued against Sri Iyyanar Traders by the State Tax Officer, Bodinayakanur Assessment Circle, citing the absence of a personal hearing and inadequate service of notice. The judgment, delivered by Justice Krishnan Ramasamy on 23 February 2026, underscores the necessity for tax authorities to ensure effective communication and procedural fairness under the GST regime.
The petitioner, Sri Iyyanar Traders, challenged the impugned order dated 4 February 2025, contending that all communications and notices from the respondent were merely uploaded on the GST common portal. The petitioner argued that they were unaware of these notices and, as a result, failed to file a timely reply. Crucially, the assessment order was passed without affording the petitioner an opportunity for a personal hearing, prompting the writ petition.
During the proceedings, counsel for the petitioner emphasized that the petitioner had already paid 100% of the tax demanded and sought an opportunity to present their case before the respondent by setting aside the impugned order. The respondent, represented by the Additional Government Pleader, acknowledged that while notices were uploaded on the GST portal, no personal hearing was provided prior to the issuance of the assessment order. The respondent also agreed that the matter could be remitted for fresh consideration.
The Court examined the record and found that the show cause notice was indeed uploaded on the GST portal, but the petitioner claimed to have been unaware of its issuance and did not receive the original notice. Justice Ramasamy observed that while uploading notices on the portal constitutes sufficient service under the law, tax officers must exercise discretion and consider alternative modes of service prescribed under Section 169 of the GST Act, especially when there is no response from the taxpayer. The Court noted that relying solely on portal uploads, without exploring other valid modes such as Registered Post Acknowledgement Due (RPAD), risks reducing the process to a mere formality and may lead to unnecessary litigation.
The judgment emphasized that effective service of notice is essential to achieving the objectives of the GST Act. The Court held that the absence of a personal hearing and the failure to serve notice through alternative means constituted a lack of opportunity for the petitioner to present their case. Consequently, the impugned assessment order was set aside.
The High Court directed the petitioner to file their reply or objection, along with supporting documents, within three weeks from the date of payment as previously stated. Upon receipt of the reply, the respondent is required to issue a clear 14-day notice, schedule a personal hearing, and thereafter pass a reasoned order on merits and in accordance with law, after hearing the petitioner. The writ petition was disposed of with these directions, and the connected miscellaneous petition was also closed.
This decision reinforces the principle that tax authorities must ensure both procedural fairness and effective communication, particularly when statutory notices are served electronically. The ruling serves as a reminder that mere technical compliance with notice requirements is insufficient if it does not afford the taxpayer a real opportunity to be heard.
Case Reported at:
Case Name: Sri Iyyanar Traders v. State Tax Officer Bodinayakanur Assessment Circle
Case Citation: (2026) taxcode.in 545 HC
