Tvl. Vel Associates vs. The Assistant Commissioner (St)

Facts

The petitioner, Tvl. Vel Associates, represented by its proprietor, filed a writ petition challenging an ex-parte order in Form GST DRC-07 dated 10.10.2025, passed by the Assistant Commissioner (ST), Tirunelveli Junction Assessment Circle, for the financial year 2024-2025. The petitioner contended that while the show cause notice and personal hearing notices were uploaded on the web portal, there was no effective physical service or proper intimation. Consequently, the petitioner failed to notice these communications and file a reply, leading to the ex-parte order. The revenue's contention was that the petitioner did not avail the opportunity for a reply and personal hearing when notices were uploaded on the portal, in relation to alleged fraudulent availment of Input Tax Credit (ITC) from a non-existent taxpayer.

Held

The Court held that the ex-parte order dated 10.10.2025 was passed without affording the petitioner an effective opportunity to be heard, thereby violating the principles of natural justice. While acknowledging that notices were uploaded on the web portal, the Court recognized the petitioner's submission regarding the lack of effective physical service or proper intimation. Consequently, the Court decided to grant one more opportunity to the petitioner to present their case. The impugned order was set aside, and the matter was remitted back to the first respondent for fresh consideration. The Court directed the petitioner to pay 25% of the disputed tax amount as a condition for this opportunity. Upon payment, the petitioner was to appear before the first respondent, file a reply, and produce documentary evidence. The first respondent was then to pass fresh orders in accordance with the law. The Court also ordered the lifting of the freezing of the petitioner's bank account.

Key Issues

1. Whether the ex-parte order dated 10.10.2025, passed by the first respondent, is violative of the principles of natural justice, specifically concerning the adequacy of notice and opportunity to be heard, as contemplated under the GST law? Petitioner's argument: The petitioner argued that the show cause notice and personal hearing notices, though uploaded on the web portal, did not constitute effective service or proper intimation. This lack of effective communication prevented the petitioner from filing a reply and participating in the proceedings, thus violating the principles of natural justice. The petitioner sought quashing of the ex-parte order and a direction for a fresh order after a proper hearing. Revenue's argument: The revenue contended that the petitioner failed to avail the opportunity provided when the show cause notice and personal hearing notices were uploaded on the web portal. The impugned order was passed ex parte due to the petitioner's non-compliance.