Orissa High Court Quashes ₹8.62-Crore Ex-Parte GST Demand Against Jindal Steel

The Orissa High Court has set aside an ex-parte GST demand raised against Jindal Steel Limited, holding that mere uploading of notices under the “Additional Notices/Orders” tab on the GST portal does not constitute valid service and violates principles of natural justice.

A Division Bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman found that the taxpayer was deprived of a meaningful opportunity to participate in the proceedings before the State Tax Officer.

The court elaborated, 

“In view of the aforesaid discussion, this Court cannot uphold the action of the State Tax Officer, as failure to provide an opportunity for a hearing does invite interference in the order impugned. This Court, appreciating the argument advanced by the learned Senior Advocate that the Assessing Officer having access to the records as uploaded by the petitioner in the web portal of the Department, necessary rectification as pointed out in the application for the rectification dated 25.04.2025 could have been taken care of even in the absence of the petitioner.”

The dispute arose from assessment proceedings for the financial year 2020–21, where the department issued a notice in Form GST ASMT-10, followed by a demand-cum-show cause notice in Form GST DRC-01 alleging short payment of tax amounting to Rs. 8.62 crore. However, these notices were uploaded only under the “Additional Notices/Orders” tab on the GST portal, without any effective mode of communication, leaving the company effectively unaware of the proceedings.

As a result, the assessment culminated in an ex-parte order raising the tax demand. Jindal Steel then filed a rectification application under Section 161 of the CGST Act, asserting that the demand was based on incorrect reliance on e-way bill figures instead of returns already on the portal, which was rejected by the department.

The Court noted that the writ petition was maintainable given the flagrant violation of natural justice, as notices uploaded under the “Additional Notices/Orders” tab were not easily accessible or prominent, and mere uploading cannot be treated as valid service under law.

The bench further observed that while Section 169 of the CGST Act recognises portal-based service as valid, exclusive uploading under this tab does not satisfy the legal requirement of service when it effectively denies notice to the taxpayer. The Court added:

“Though Section 169 provides uploading of notices/orders in the portal is one of the modes of service on the taxpayer for taking consequential action, it is in the present context felt expedient to observe that the petitioner-taxpayer remained unaware about such notices so that it could take appropriate step at right point of time.”

Accordingly, the Court remanded the matter to the department, directing it to grant Jindal Steel a proper opportunity of a hearing and to pass a reasoned order after examining the material on record.

For Petitioner: Senior Advocate Rudra Prasad Kar, along with Advocates Satya Smruti Mohanty, Sarvavid Subahs Pradhan, Goutam Rai, Gyaninee Nayak, Sambit Sekhar Moharana and Prakriti Patnaik

For Respondent: Standing Counsel, Sunil Mishra