Madras HC Quashes GST Assessment for Wrong Application of Section 73: Mandates Section 74A for FY 2024-25 Onwards

In a significant ruling concerning the procedural evolution of the Goods and Services Tax (GST) regime, the Madras High Court has clarified the jurisdictional applicability of demand provisions for the financial year 2024-25. The Court, in the case of M Gnanaraj Vs Assistant Commissioner (ST), set aside an assessment order passed under the erstwhile Section 73 of the GST Act, holding that proceedings for periods commencing from April 1, 2024, must strictly be governed by the newly applicable Section 74A.

Furthermore, the High Court reiterated the critical importance of effective service of notice. It held that while uploading notices on the common portal is legally valid, Revenue officers must not treat service as a mere "empty formality." If an assessee fails to respond to digital notices, officers are duty-bound to explore alternative modes of communication prescribed under Section 169 to ensure the principles of natural justice are upheld.

Factual Background of the Case

The writ petition was filed by the assessee challenging an assessment order dated 17.06.2025. The dispute arose from the following circumstances:

  1. Mode of Communication: The Respondent (Revenue Department) had uploaded all show cause notices and communications exclusively on the GST common portal.
  2. Non-Participation: The assessee contended that they were unaware of these digital uploads. Consequently, they failed to file a reply within the stipulated timeline.
  3. Ex-Parte Order: Due to the absence of a response, the Assistant Commissioner (ST) proceeded to pass the impugned order on an ex parte basis, without affording the assessee an opportunity for a personal hearing.
  4. Jurisdictional Error: Crucially, the proceedings pertained to the Financial Year 2024-25. The Revenue had issued the Show Cause Notice (SCN) and passed the order invoking Section 73 of the GST Act.

The assessee approached the High Court, arguing that the order was legally unsustainable due to a violation of natural justice and a fundamental jurisdictional flaw regarding the statutory provisions invoked.

Key Contentions of the Parties

Arguments by the Petitioner (Assessee)

The legal counsel for the assessee raised two primary objections: