Madras High Court: GST Portal Service Sufficient, But Authorities Must Ensure Effective Communication

Chennai: In a significant ruling addressing a batch of over 50 writ petitions, the Madras High Court on April 22, 2025, held that while service of notices and orders via the GST Common Portal under Section 169(1)(d) of the Goods and Services Tax Act, 2017, is legally sufficient, tax authorities have a responsibility to employ more effective communication methods, such as registered post, especially when initial electronic notices receive no response.

Justice KrishnanRamasamy , presiding over the cases, largely set aside ex parte assessment orders passed against numerous businesses, finding fault on both the petitioners for failing to diligently check the portal and the tax authorities for relying solely on a potentially ineffective mode of service without attempting alternatives when faced with non-compliance.

Background of the Case

The multitude of petitioners, comprising various businesses and proprietors, had approached the High Court challenging assessment orders and consequential demands for tax, interest, and penalty passed against them by the State Tax Officers. The core grievance across most petitions was that these orders were passed ex parte, meaning without the participation of the taxpayer, because they were allegedly unaware of the show cause notices or subsequent reminders issued by the department.

Petitioners cited various reasons for their lack of awareness, including: * Notices being uploaded to a less frequently checked section of the GST portal ("View Additional Notices and Orders") instead of the primary "View Notices" section. * Reliance on consultants or employees who failed to monitor the portal effectively. * Lack of computer literacy or ill-health, particularly among senior citizens.

They argued that issuing notices solely through the common portal, without attempting other modes like registered post (Section 169(1)(b) GST Act), especially after initial notices went unanswered, violated principles of natural justice and rendered the service ineffective under Section 169 of the GST Act read with Section 13 of the Information Technology Act, 2000.

Arguments Presented

Counsel for the petitioners contended that for service via an electronic medium to be considered received under Section 13(2) of the IT Act, the computer resource must be "designated" by the addressee. They argued that the common portal was not explicitly designated by them, and thus receipt should only be deemed to occur upon retrieval, not mere uploading. They also pointed out that Section 169(2) GST Act's deeming fiction of service applied only to "tendered," "published," or "affixed" notices, not uploaded ones.

The respondents, represented by Senior Advocates and Special Government Pleaders, countered that Section 169 of the GST Act provides alternative modes of service, and using any one mode, including uploading to the common portal (Section 169(1)(d)), constitutes sufficient legal service. They argued that upon registration, taxpayers are bound to check the common portal, which by operation of law or act of registration, becomes their designated computer resource. Citing Section 13(2)(a)(i) IT Act, they asserted that receipt is instantaneous the moment the electronic record enters the designated resource (i.e., upon uploading). They also highlighted that SMS and email alerts are sent as a cautionary measure and that consultant/employee negligence falls on the assessee. They referred to prior judgments affirming the sufficiency of portal service.

Court's Analysis and Findings

Justice Ramasamy acknowledged that Section 169 GST Act clearly lists alternative service methods, making any one sufficient. Referring to a previous Madras High Court decision ( Pandidorai Sethupathi Raja vs. Superintendent of Central Tax ), the court noted that uploading could be considered a form of "tendering" for the purposes of Section 169(2), though this point was not central to the final reasoning.

The crucial part of the court's analysis focused on Section 13 of the IT Act and the concept of a "designated computer resource." The court found that, read in conjunction with Section 169(1)(d) of the GST Act, the common portal does function as the assessee's designated computer resource from the date of registration until cancellation. Therefore, in terms of Section 13(2)(a) and (b) of the IT Act, the receipt of electronic records (notices, orders) occurs immediately when they are uploaded and enter the common portal. Based on this, the court affirmed that uploading documents to the common portal is indeed sufficient service under the law.

However, the court sharply criticized the tax authorities for stopping there. Despite sufficient legal service, the court observed that in many cases, this method was clearly not effective . When initial notices uploaded to the portal received no response, the authorities continued to send reminders via the same ineffective channel instead of resorting to alternative modes like Registered Post with Acknowledgement Due (RPAD), which could ensure actual knowledge. The court described this practice as an "empty formality" that wastes time and resources for both taxpayers and the judiciary.

Finding fault on both sides – the petitioners for not diligently checking the portal as required by the statute and the respondents for not adopting effective alternative service methods when electronic notices went unanswered – the court decided to set aside the ex parte orders, but mostly on conditions.

The Decision and Conditions

The court categorized the petitions and issued the following directions:

1. Cases with Reply Filed, No Personal Hearing: In three specific writ petitions (W.P.Nos. 3119, 4015 & 5038 of 2025) where petitioners had filed a reply but were denied the mandatory personal hearing under Section 75(4) GST Act before an adverse order was passed, the court set aside the impugned orders without any conditions .
2. Case with Voluntary Registration Cancellation: In one petition (W.P.No. 5806 of 2025) where GST registration was cancelled at the petitioner's request (implying an alternative communication method like email would have been provided), but notices were still sent via the portal, the order was set aside subject to payment of 10% of the disputed tax amount . The court reasoned that Section 13(2)(a)(ii) IT Act might apply here, where receipt upon retrieval is relevant if sent to a non-designated resource after designation.
3. Other Ex Parte Cases (Majority): For all other writ petitions, including cases where registration was suo motu cancelled by the department (W.P.No. 5055 of 2025) and those where appeals were rejected on limitation grounds (W.P.Nos. 3084 & 4032 of 2025), the ex parte assessment orders were set aside subject to payment of 25% of the disputed tax amount in each case. The court cited the shared fault between the taxpayer and the department for the lack of effective communication.

The court directed that the setting aside of orders subject to payment would take effect from the date of payment (within four weeks). Petitioners must then file their replies within three weeks of payment. The tax authorities are mandated to provide a clear 14-day notice for a personal hearing, hear the petitioners fully, and pass fresh orders in accordance with the law.

Finally, the court directed that any bank attachment orders issued in connection with the set aside assessment orders must be lifted forthwith.

This judgment underscores the judiciary's expectation that while digital communication is legally recognized, tax authorities must ensure practical effectiveness in their interactions with taxpayers, utilizing alternative modes provided by law when electronic methods prove unsuccessful, thereby upholding the principles of natural justice.