Facts of the Case

Sri Venkateswara Agro Centre, a proprietorship in Tiruchirappalli District, suffered an adverse assessment order dated 27.08.2024 for the tax period 2019-20, preceded by a show cause notice in Form GST DRC-01 dated 27.05.2024, passed by the Deputy State Tax Officer under the GST Act. The petitioner belatedly filed an appeal before the Appellate Deputy Commissioner (GST), Trichy, on 17.02.2025, having already deposited 10% of the disputed tax at that time, but the appeal was rejected by order dated 05.03.2025 in Form GST APL-02 as being filed beyond the condonable period under Section 107. The petitioner then approached the Madurai Bench of the Madras High Court, and the matter was disposed of at the admission stage itself on 02.07.2025.

Issues Involved

  1. Whether the assessment order should be quashed despite the statutory appeal against it having been rejected as time-barred beyond the condonable period under Section 107.
  2. On what terms such relief, if granted, should be conditioned to protect the revenue's interest.

Petitioner's Arguments

  • The petitioner had already deposited 10% of the disputed tax at the time of filing the appeal on 17.02.2025, demonstrating bona fides despite the appeal being filed beyond the condonable period.
  • Reliance was placed on the consistent view taken by the Madurai Bench in similar cases permitting relief against time-barred rejections on suitable pre-deposit conditions.

Respondent's Arguments

  • The Additional Government Pleader's submissions are reflected in the conditional nature of the relief granted, rather than an outright opposition to the quashing of the assessment order.

Court Order / Findings

  • Taking note of its consistent view on such matters, the Court quashed the impugned assessment order dated 27.08.2024, subject to the petitioner depositing 25% of the disputed tax within 30 days, with the 10% already paid at the appeal stage to be set off against this amount (leaving a net 15% to be additionally deposited).
  • The quashed order was directed to be treated as an addendum to the original show cause notice in Form GST DRC-01 dated 27.05.2024, and the petitioner was directed to file a fresh reply within 30 days.
  • The Court made clear that if the petitioner failed to comply with any of the stipulated conditions, the department would be at liberty to proceed against the petitioner as if the writ petition had been dismissed.
  • The writ petition was disposed of on these terms, with no order as to costs.

Important Clarification

  • Even where a statutory appeal has been rejected as time-barred beyond the condonable period under Section 107, the Madurai Bench of the Madras High Court has consistently entertained writ relief against the underlying assessment order on a higher pre-deposit condition (commonly 25% of disputed tax).
  • Such relief effectively reopens adjudication by treating the quashed order as an addendum to the original show cause notice, requiring a fresh reply, rather than remitting the matter to the appellate stage.
  • The relief is strictly conditional — non-compliance with the pre-deposit or reply timeline automatically revives the department's right to proceed as though the writ petition had failed.

Sections Involved

  • Section 73/74, CGST/TNGST Act, 2017 — the substantive provision under which the original demand in DRC-01 was raised.
  • Section 107, CGST/TNGST Act, 2017 — prescribes the limitation and condonable period for filing appeals, whose expiry triggered this writ petition.

Decision – In Favour of

Disposed of with directions, in part in favour of the assessee. The assessment order was quashed, but only on the strict condition of an enhanced 25% pre-deposit and a fresh reply, failing which the relief lapses automatically.

Case Details

Court: Madurai Bench of the Madras High Court
Case No.: W.P.(MD).No.17913 of 2025 (with W.M.P(MD) No.13712 of 2025)
Coram: Hon'ble Mr. Justice C. Saravanan
Date of Decision: 02.07.2025

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