Madras HC | Madurai Bench | Justice Krishnan Ramasamy* *Case*: _Kathiravan v. Commissioner of State Tax_ | W.P.(MD)No.2286 of 2026 | 16.02.2026

[03/05, 07:52] sekarreporter1: https://www.taxscan.in/top-stories/madras-hc-sets-aside-gst-demand-holds-personal-hearing-mandatory-before-passing-assessment-order-us-74-1443498
[03/05, 07:52] Meta AI: *Madras HC | Madurai Bench | Justice Krishnan Ramasamy*
*Case*: _Kathiravan v. Commissioner of State Tax_ | W.P.(MD)No.2286 of 2026 | 16.02.2026

—

*1. What Happened*
*Assessee*: Kathiravan
*Disputed orders*: Assessment orders dt. 08.01.2024 & 29.04.2024 under *Sec 74 TNGST/CGST Act* for AY 2017-18 & 2018-19
*Tax demand*: ₹18.74 lakh + ₹9.40 lakh

*Dept’s case*: Show cause notices uploaded on GST portal. No reply filed electronically, so orders passed ex parte

*Petitioner’s case*: Replies were *submitted in person*, but not uploaded on portal. *No personal hearing given* before adverse orders

*2. Govt’s Admission*
Additional Govt Pleader *admitted* no opportunity for personal hearing was given prior to passing orders

*3. Court’s Ruling*
*Held*: _“Passing an adverse order without giving personal hearing is nothing but violation of principles of natural justice.”_

*Result*:
1. *Assessment orders set aside*
2. *Matter remanded* for fresh adjudication
3. *Conditions*: Petitioner had already deposited 25% of disputed tax. AO must issue notice fixing date for personal hearing + pass reasoned order

*4. Legal Principle Reiterated*
*Sec 74 GST* involves fraud/willful misstatement + heavy penalty. Hence *personal hearing is mandatory* before passing order u/s 74. Mere uploading on portal ≠ compliance if assessee doesn’t respond. AO should explore other modes u/s 169(1).

*5. Similar Recent Cases by Madras HC*
Same principle applied in multiple cases:
– *Swan Enterprises*: Duplicate Sec 74 order for same year set aside – no personal hearing
– *Rajathi Silks*: 97% tax already recovered, still order set aside for no hearing
– *SPR Enterprises*: Officer must try other modes of service if no portal response

—

*Bottom Line*: For GST Sec 74 demands involving fraud/penalty, Madras HC is strict – _no personal hearing = order goes_. Uploading SCN on portal alone isn’t enough. If assessee doesn’t reply, dept must try physical service too. Natural justice overrides portal compliance.

Citation: Taxscan report