Facts of the Case

Tvl. Annamalaiar Mills Private Limited challenged an order dated 28 March 2024 confirming a GST demand for the tax period 2018-19, preceded by a show cause notice in Form GST DRC-01 dated 27 December 2023 and three separate personal hearing notices dated 31 January, 29 February and 16 March 2024, none of which the petitioner responded to, resulting in confirmation of the demand.

Issues Involved

  1. Whether an assessment order confirmed after a taxpayer's complete non-response to the show cause notice and repeated personal hearing notices should nonetheless be set aside on standard terms applied by the Madras High Court in similar matters.

Petitioner's Arguments

  • The petitioner sought the benefit of the same conditional relief the Madras High Court had extended in similar circumstances to other taxpayers, effectively seeking one more opportunity to contest the demand on merits despite having earlier ignored the notices.

Respondent's Arguments

  • No specific opposition was recorded; the petition was disposed of at the admission stage itself with the consent of both counsel.

Court Order / Findings

  • The Court noted that under similar circumstances it had come to the rescue of taxpayers in comparable situations by quashing such orders on terms, and found no reason to take a different view here.
  • It disposed of the petition by quashing the impugned order subject to the petitioner depositing 25% of the disputed tax within thirty days, and directed that the petitioner file a reply to the original DRC-01 notice, with the quashed order to be treated as an addendum to that show cause notice.
  • On compliance, the respondent was directed to pass fresh orders on merits within three months after hearing the petitioner; non-compliance would allow the department to proceed as if the writ petition had been dismissed in limine.

Important Clarification

  • The Madras High Court applies a now well-settled template in GST matters where a taxpayer has ignored an SCN and personal hearing notices: the confirmed order is quashed but only on a 25% pre-deposit condition, and the quashed order itself is treated as an addendum to the original SCN so that the taxpayer must still substantively respond to it.
  • This approach balances revenue protection (via the deposit) against the taxpayer's right to be heard, without requiring a fresh, separate SCN to be issued from scratch.

Sections Involved

  • Form GST DRC-01 – the original show cause notice preceding the impugned order.
  • Section 107, GST Act – underlying framework for pre-deposit conditions applied by analogy in this conditional quashing.

Decision – In Favour of

The decision is in favour of the assessee, conditional on a 25% pre-deposit within a fixed period, following which the matter proceeds to a fresh, merits-based adjudication.

Case Details

Court: Madras High Court, Madurai Bench. Case No.: W.P.(MD) No. 19228 of 2025 & W.M.P.(MD) No. 14757 of 2025. Coram: Hon'ble Mr. Justice C. Saravanan. Date of Order: 16 July 2025.

Link to Download the Order

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