GST: High Court Quashes Cryptic, Non-speaking, Illegal, Arbitrary Order
The current writ petitions titled W.P.(MD) Nos. 17853 & 17855 to 17858 of 2025 have been served before the Madurai Bench of the Madras High Court by a business entity named M/s. Indian Spices, represented by its proprietor, A. Syed Ibrahim. They had filed five separate Writ Petitions in relation to different Assessment Years under the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act, 2017). In this case, the respondents are the State Tax Officer, Uthamapalayam (the assessing authority), and the Deputy Commissioner (GST–Appeal), Madurai (the appellate authority). The case is regarding the five assessment years, 2017-18, 2019-20, 2020-21, 2021-22, and 2022-23.
What Triggered Dispute?
- The Tax Department conducted an inspection at the petitioner’s business premises of M/s. Indian Spices on 09.06.2022. Following the inspection, the tax officer issued Show Cause Notices (SCNs) in DRC-01 and DRC-01A formats for each assessment year, which are used to inform a taxpayer about alleged tax liability and explain the reason why the particular action should not be taken against them.
- Following this, the State Tax Officer issued the final assessment orders dated 16.06.2023 for each of the five years: 2017-18, 2019-20, 2020-21, 2021-22, and 2022-23.
What Went Wrong?
- Petitioner replied to the maximum of the notices, except for 2022-23, before the issue of the final order. The petitioner did not submit any reply for the assessment year 2022-23.
- The petitioner finds the final orders as illegal and unfair (did not provide detailed reasoning) and passed without properly hearing them, which violates Section 75(4) of the TNGST Act. This section says that before passing an adverse order, the taxpayer must be given a chance for a personal hearing.
Appeal Problem
- The petitioner tried to file appeals against the assessment orders.
- However, the appeals were filed 68 days late to the allowed extension period, which cannot be accepted as per the law.
- As a result, the Appellate Commissioner rejected the appeals outright (called “dismissed in limine”) on 15.11.2024 and 29.11.2024.
- Since the appeals were not accepted due to delay, and there was no other legal remedy, the petitioner approached the High Court under Article 226 of the Constitution seeking relief by way of Writ Petitions.
They argued that:
- There was no proper opportunity given to them to defend their case.
- The orders were one-sided (ex parte order) and not based on full facts.
- They have supporting records that prove their case, which were not considered.
Respondents’ Argument
The Additional Government Pleader, representing the tax department, argued:
- The petitioner slept on their rights, meaning they did not act on time.
- The law does not allow the High Court to rescue someone who missed deadlines.
- They cited two Supreme Court cases (Singh Enterprises and Hongo India Pvt Ltd) to show that once the appeal deadline is over, courts cannot extend it.
- Therefore, the writ petitions should be dismissed.
High Court’s Decision
The judge, after hearing both sides, decided to partially help the petitioner, but on certain conditions:
- The petitioner must deposit 15% of the disputed tax amount, in addition to the 10% already deposited while filing appeals. This tax should be deposited in cash, from the Electronic Cash Ledger, within 30 days from the date they receive this order.
- If the deposit is made, the impugned assessment orders (the ones challenged in the writ petitions) will be quashed. The petitioner must file fresh replies to the original show cause notices, treating the old final orders as additional notes to those notices. The State Tax Officer must then pass new orders after giving the petitioner a proper personal hearing, within 6 months.
- If a deposit is not made, the writ petitions will be treated as dismissed automatically, and the tax department can continue recovery or take other actions.
- The petitioner must cooperate. The petitioner is required to submit documents and fully cooperate in the new proceedings.
The writ petitions were then closed and did not ask either side to pay any costs. All other related petitions were also closed.