The Patna High Court, in a writ petition filed in 2025, has once again emphasized that tax authorities under the GST regime cannot proceed against a taxpayer without first properly serving show-cause notices and giving a real opportunity of hearing. The Court quashed an order passed under Section 73 of the Central Goods and Services Tax Act, 2017 (read with the Bihar GST Act, 2017) because the notices were only uploaded on the GST portal and were never effectively communicated to the taxpayer. As a result, the High Court held that the demand, as well as the summary issued in Form GST DRC-07, could not stand.
This judgment is an important reiteration of the principle that procedural fairness and natural justice cannot be sacrificed merely because GST is administered through an online portal. Even though GST is technology-driven, the State cannot expect a registered person to keep checking the portal every day to find out whether any show-cause notice has been uploaded against them.
Simplified Explanation of the Judgment
The writ petition was filed by a registered GST taxpayer (referred to here as the petitioner) challenging:
- The order dated 24.04.2024 passed by the jurisdictional GST officer under Section 73 of the CGST Act, 2017/Bihar GST Act, 2017; and
- The corresponding summary of order in Form GST DRC-07 of the same date; and
- A later communication dated 23.01.2025 issued by the authority for recovery.
The petitioner’s main grievance was that the tax officer had straightaway passed a demand order imposing tax, interest, and penalty alleging difference in turnover, without giving the petitioner an effective chance to explain that the discrepancy arose only due to a typographical/human error in one of the monthly returns (GSTR-3B) for December 2018. According to the petitioner, while filing GSTR-3B, an extra digit “9” was mistakenly added, which inflated the turnover in that month. However, in the annual return (GSTR-9) and reconciliation statement (GSTR-9C) for 2018–19, the correct figures were disclosed and there was no suppression of turnover.
The petitioner therefore argued before the High Court that:
- The entire proceeding was initiated only on the basis of the error in GSTR-3B;
- The authority ignored the annual return and reconciliation statement which were already available on the GST portal;
- More importantly, the show-cause notice dated 23.12.2023 and the reminder notices dated 03.04.2024, 08.04.2024 and 19.04.2024 were never actually communicated to the petitioner. They were only uploaded on the portal;
- Because the petitioner did not know about these notices, no reply could be filed, and the authority straightaway passed the final order on 24.04.2024;
- After that, the department even started recovery proceedings, which led to the filing of the writ petition.
Ordinarily, in GST matters, when an order is passed under Section 73 or 74, the aggrieved person has a statutory alternative remedy of appeal. The State also took this stand and argued that since an appeal is available, the High Court should not entertain the writ petition.
However, the High Court carefully examined the record and noticed a crucial aspect:
- The entire show-cause process—from notice to reminders—was only uploaded on the GST portal.
- No separate communication, such as e-mail, physical service, or any other mode to draw attention of the petitioner, was made.
- The Court observed that a taxpayer cannot be expected to monitor the GST portal every single day to check whether a new show-cause notice has appeared.
- Therefore, the Court held that mere uploading of notice on the portal, without ensuring actual or reasonable communication, is not sufficient compliance with the principles of natural justice.
Because there was a clear violation of natural justice, the Court further held that the petitioner need not be compelled to go through the appellate remedy. The High Court has power to interfere directly in such cases.
On this “short ground” itself, the Court set aside the impugned order dated 24.04.2024 (referred to in the petition as Annexure P-9) along with the consequential steps.
At the same time, the Court balanced both sides. It did not give the petitioner a clean chit on merits. Instead, the Court said:
- Now that the petitioner has become aware of the show-cause notice and the reminders (because of the writ proceedings),
- The petitioner must file a reply/explanation to the show-cause notice dated 23.12.2023 within three weeks from the date of the judgment (i.e. from 24.02.2025),
- After receiving the reply, the proper officer must give the petitioner oral/personal hearing and then pass a fresh speaking order within two months from receipt of the reply.
In effect, the Court has reopened the assessment/adjudication, restored the petitioner’s right to be heard, and directed the department to redo the process in accordance with law.
This judgment is therefore a good example of how High Courts protect procedural rights in tax matters, especially when the department relies only on electronic communication and the taxpayer is deprived of an opportunity to explain genuine mistakes like a typing error in GST returns.
Significance or Implication of the Judgment
- For GST taxpayers: The ruling confirms that the tax department cannot silently upload a show-cause notice and later pass a demand order saying “we uploaded it, you should have checked.” Proper and effective service is necessary.
- For the State/GST authorities: The court has reminded officers that technology is a facilitative tool, not a substitute for natural justice. Where large tax demands, interest, and penalty are involved, officers must ensure that the taxpayer actually receives the notice.
- For cases of return mismatch/clerical error: The judgment strengthens the argument that where the taxpayer has already filed correct annual return and reconciliation, and the alleged mismatch is only on account of a human error, the officer must consider those documents before confirming a demand.
- For litigation strategy: It clarifies that where there is a patent breach of natural justice, the High Court can entertain a writ even though an appeal is available.
Legal Issue(s) Decided and the Court’s Decision with Reasoning
- Whether the petitioner was required to first file an appeal under the GST Act before approaching the High Court?
- Court’s decision: No. Since there was a violation of principles of natural justice (non-communication of show-cause notice and reminders), the writ petition was maintainable.
- Reasoning: A person cannot be relegated to a statutory appeal when the foundational requirement of hearing is missing.
- Whether mere uploading of show-cause notice and reminders on the GST portal amounts to sufficient service?
- Court’s decision: No, not in the facts of this case.
- Reasoning: The notices were only uploaded on the portal and were never otherwise intimated. A registered person cannot be expected to check the portal daily. Hence, the petitioner was effectively denied the opportunity to respond.
- Whether the demand order dated 24.04.2024 and DRC-07 could survive despite such violation?
- Court’s decision: No.
- Reasoning: Since the petitioner did not get a real chance to explain the alleged discrepancy (which was said to be a mere typographical error in GSTR-3B), the final order was vitiated and had to be set aside.
- What directions were issued by the Court?
- The petitioner was directed to file reply to the show-cause notice dated 23.12.2023 within three weeks from 24.02.2025.
- The concerned authority was directed to give oral hearing and pass a fresh order within two months from receipt of the reply.
Case Title
Shree Ram Sales LLP vs. The State of Bihar & Anr.
(As per Patna High Court, CWJC No. 2768 of 2025)
Case Number
Civil Writ Jurisdiction Case No. 2768 of 2025
Coram and Names of Judges
- Hon’ble Mr. Justice P. B. Bajanthri
- Hon’ble Mr. Justice Sunil Dutta Mishra
(Oral judgment delivered on 24.02.2025)
Names of Advocates and who they appeared for
- For the petitioner:
- Mr. Gautam Kumar Kejriwal, Advocate
- Mr. Alok Kumar Jha, Advocate
- Mr. Mukund Kumar, Advocate
- Mr. Akash Kumar, Advocate
- Mr. Aditya Raman, Advocate
- For the respondents/State of Bihar (Department of State Taxes):
- Mr. Vivek Kumar, Government Pleader (7)
Link to Judgment
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