In a recent ruling, the Madras High Court quashed GST (Goods and Services Tax) demand orders, terming them “ex parte.” The court observed that the taxpayer had voluntarily paid the GST liability before the issuance of the demand order, yet the authorities failed to provide an opportunity for a hearing. It was evident that the order was passed without considering the updated status of the case, leading to a violation of natural justice.
The petitioner argued that all notices and communications leading to the demand order were merely uploaded on the GST portal under the “View of Additional Notices and Orders” section. Since the petitioner was unaware of these notices, they were unable to file a reply or appear for a personal hearing.
Despite this, the GST authorities proceeded to pass the impugned order without granting the petitioner an opportunity to present their case. The court noted that the respondent department did not take any steps to serve notices through physical means or direct communication, thereby depriving the petitioner of a fair hearing.
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Additionally, the petitioner contended that a voluntary payment of Rs. 22,34,326/- was made even before the demand order was issued. The government counsel acknowledged this claim and stated that, subject to verification, the actual tax liability was only Rs. 16,80,931/-. Considering these facts, the court observed that the demand order was passed in violation of natural justice as the petitioner was not given a fair chance to respond.
After due consideration, the bench of Justice Krishnan Ramasamy set aside the impugned order and remanded the matter for fresh adjudication. The court directed the petitioner to file a reply with supporting documents within two weeks of receiving the certified copy of the order. It also instructed the GST authorities to issue a clear 14-day notice for a personal hearing before making any further decisions. The fresh adjudication will also involve verifying the petitioner’s claim of prior payment.
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The court allowed the writ petition and emphasized that taxpayers must be given a fair opportunity to present their case before any demand orders are finalized.
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