Madras High Court Quashes GST Appellate Order; Allows Fresh Hearing

Madras High Court Quashes GST Appellate Order; Allows Fresh Hearing

The present writ petition is being filed by a company named Tvl Nesta, represented by its owner, Sathesh Kumar from Trichy, under Article 226 of the Constitution of India before the Madras High Court. Here, the company is challenging an order dated 10.03.2025 that was passed by the Appellate Deputy Commissioner (ST). The order was dismissing their appeal against a tax assessment order on the ground that the appeal was filed late as per Section 107 of the respective Goods and Services Tax Enactments, 2017.

The dispute arose when the Deputy State Tax Officer passed an assessment order dated 24.07.2023, relating to the period between 01.04.2019 to 31.03.2020 and raised a tax demand against the company. However, the company did not participate in any proceedings before the Deputy State Tax Officer. Later, the petitioner filed an appeal before the Appellate Deputy Commissioner. However, the appeal was rejected on 10.03.2025, because it was filed after the allowed time limit under Section 107 of the GST Act, 2017.

However, the company was still dissatisfied with the orders and hence filed an appeal in the high court challenging the impugned order. When the court observed the entire case deeply, it found that the company was not given any chance to represent its side in the original assessment order dated 24.07.2023. The High Court also took reference from an earlier hearing on the same matter, where the court quashed the assessment orders when the taxpayer was not heard, but on certain conditions. So, the court decided to give the same relief to the company here. Therefore, the court quashed the appellate order dated 10.03.2025, provided the company pays 25% of the disputed tax and also treated the quashed order as a continuation of the original show cause notice.

The petitioner had already paid 10% at the time of filing the appeal. Therefore, they have to pay the remaining 15% of the disputed tax in cash from the Electronic Cash Register within 30 days of receiving a copy of this order. After making the payment, the company must file a reply to the show cause notice (SCN). The tax officer must then conduct a fresh hearing and pass a new assessment order after listening to the petitioner properly. If the company fails to pay the 15% disputed tax or does not file the reply, the High Court order will be treated as if the writ petition were dismissed. Then the tax department can immediately start recovery proceedings against the petitioner as per the GST laws. The Court did not award any costs to either party.