Facts of the Case

The appellant, M/s Chinnamanur Sri Annai Abirami Chit (P) Ltd., appealed against a Single Judge's dismissal (in W.P.(MD) No. 25291 of 2022, dated 8 November 2022) of its writ petition challenging a tax demand raised by the Assistant Commissioner of GST & Central Excise, Dindigul-II Division, and the Superintendent of CGST & Central Excise, Theni Range. The Single Judge had dismissed the writ on the ground that an alternate statutory remedy (a departmental appeal) was available. The appellant's principal grievance on appeal was the requirement of a pre-deposit as a condition for filing that statutory appeal.

Issues Involved

  1. Whether the pre-deposit condition for the statutory appeal was so onerous as to justify bypassing it through a writ petition.
  2. Whether the Division Bench should examine the merits of the underlying tax demand despite the availability of an alternate remedy.

Petitioner's Arguments

  • The appellant urged the Court to consider its contentions on the merits of the tax demand, despite the Single Judge's finding that an alternate remedy existed.
  • The pre-deposit condition attached to the statutory appeal was an impediment justifying the writ court's intervention.

Respondent's Arguments

  • The Senior Standing Counsel pointed out that the pre-deposit requirement was only 7.5% of the tax levied, which could not be considered onerous.

Court Order / Findings

  • The Division Bench agreed with the Revenue that a 7.5% pre-deposit was not onerous, and declined to examine the merits given the availability of the alternate statutory remedy before the appellate authority, which could go into questions of fact as well.
  • The Single Judge's order was sustained, and the Writ Appeal was dismissed, but the Court granted the appellant one month from receipt of the judgment to file its statutory appeal, directing that the appellate authority entertain it without reference to delay, given the pendency of this litigation and the intervening Covid-19 lockdown.

Important Clarification

The Court decided nothing about the correctness of the underlying tax demand — it only held that a 7.5% pre-deposit is not so onerous as to warrant bypassing the statutory appeal mechanism. The practical benefit for the appellant is the extended, delay-protected window to now file that appeal and have the tax demand examined on its merits by the appellate authority.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — appellate pre-deposit requirement (Section 107)

Decision – In Favour of

Decided against the appellant on the writ appeal itself, which was dismissed; however, the appellant was relegated to the statutory appeal remedy with an extended, delay-protected filing window — disposed of without a decision on the merits of the tax demand.

Case Details

Court: Madurai Bench of the Madras High Court
Case No.: W.A.(MD) No. 668 of 2023 with CMP(MD) No. 5976 of 2023
Coram: Justice R. Subramanian and Justice L. Victoria Gowri
Date of Judgment: 2 June 2023

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