This is a rather old-school way to integrate with PayPal; I think the company generally steers people to the Website Payments Standards button factory/posts with hidden fields to access this functionality rather than putting parameters right in the URL. That said, any parameter you can send in a button post can also be sent in a plain GET URL, so yes you should be able to pass in a notify_url directly in the GET parameters as you show above.
However, the notify_url is intended only to override the selling account's normal notification URL. You need to set up a notification URL in your profile in order to turn the feature on; I believe a transaction-specific override URL will be ignored if the feature is not enabled. Once you turn on the IPN feature you should be able to override it this way... but you also might not need to, unless you want the postback URL to vary for each payment.
See also the WPS integration guide: https://cms.paypal.com/cms_content/GB/en_GB/files/developer/PP_WebsitePaymentsStandard_IntegrationGuide.pdf
and the IPN guide: https://developer.paypal.com/webapps/developer/docs/classic/ipn/integration-guide/IPNIntro/