Ex-Parte GST Orders Without Personal Hearing Are Liable to Be
Set Aside: Madras High Court in Rohini Movie Park Case
Brief
Summary:
In the landmark case Rohini
Movie Park vs. State Tax Officer, the Madras High Court quashed an ex-parte
order passed under Section 73 of the CGST/TNGST Act, 2017, on the grounds that no
personal hearing was provided to the taxpayer. Although service of notice
through the GST portal is legally valid, the Court ruled that mere
procedural compliance is not enough if it denies the taxpayer an effective
opportunity to respond. The case reinforces the principle of natural justice
and directs tax authorities to use alternative communication methods
when taxpayers remain unresponsive.
Case Title
and Details:
- Case Name:
Rohini Movie Park vs. State Tax Officer
- Case No.:
W.P.No.26256 of 2025 & W.M.P.Nos.29552, 29553 & 29555 of 2025
- Date of Order:
22.07.2025
- Court:
High Court of Judicature at Madras
Background
and Facts of the Case:
Rohini Movie Park,
represented by its partner Mr. R. Paneerselvam, received an assessment order
in Form DRC-07 dated 07.01.2025 from the Commercial Taxes Department under Section
73 of the CGST/TNGST Act for the financial year 2023–24.
According to the
petitioner:
- All communications and notices were
only uploaded on the GST portal under the "View Additional
Notice and Orders" section.
- The petitioner was unaware of
these notices and therefore could not submit a reply or request a
personal hearing.
- The order was passed ex parte
without providing an opportunity to be heard.
- The petitioner approached the High
Court seeking to quash the assessment order and offered to pay 25%
of the disputed tax to demonstrate bona fide intent.
Submissions
Before the Court:
Petitioner’s
Submissions:
- Notices were uploaded in a manner not
reasonably accessible or visible to the petitioner.
- No opportunity of personal hearing
was granted, which violates principles of natural justice.
- The petitioner is willing to
deposit 25% of the disputed tax and requested that the matter be
remanded for fresh consideration.
Respondent’s
Submissions (Department):
- Argued that uploading notices on
the portal is a valid form of service under the GST Act.
- However, admitted that no personal
hearing was granted before passing the final order.
- Agreed that the matter could be
remanded if the petitioner deposits 25% of the disputed tax.
Findings of
the Hon’ble High Court:
- The Court acknowledged that service
via the portal is valid, but merely uploading notices is not
effective service if the taxpayer does not respond.
- The authority should have explored
alternative modes of service under Section 169(1) of the GST
Act — such as RPAD (Registered Post Acknowledgment Due).
- Passing an order just for the sake
of compliance defeats the purpose of natural justice and causes unnecessary
litigation.
- Reiterated that the object of the
GST Act is to ensure fairness and transparency, not procedural
rigidity.
Final
Judgment & Directions:
The Court passed the
following directions:
1. The
impugned order dated 07.01.2025 was set aside.
2. The
matter was remanded to the respondent for fresh adjudication.
3. The
petitioner shall pay 25% of the disputed tax amount within 4 weeks.
4. The
petitioner must submit a fresh reply with supporting documents within 3
weeks of making the payment.
5. The
respondent shall issue a 14-day notice for personal hearing, and
thereafter, pass a fresh speaking order on merits.
The Writ Petition was disposed
of with no costs.
Conclusion:
The Rohini Movie Park
judgment is a significant reminder that technical service of notice is not a
substitute for meaningful communication. It upholds the spirit of
justice over formality, ensuring that taxpayers are genuinely given an
opportunity to defend themselves. Tax authorities must balance procedural
compliance with practical fairness to reduce avoidable litigation.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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