Facts of the Case

M/s.Meena Agencies challenged an order dated 22.02.2025 passed under Section 73 of the GST enactments by the State Tax Officer (FAC), Madurai Rural East Circle, for the tax period 2020-2021, preceded by a show cause notice in Form DRC-01 dated 26.11.2024. The petitioner had sought time twice by way of representations but did not file a substantive reply, and also failed to appear at personal hearings fixed on 24.01.2025 and 01.02.2025, resulting in the ex-parte assessment; no appeal was filed against the order. Crucially, it was brought to the Court's notice that the petitioner had already paid Rs.74,169/- towards CGST and Rs.74,169/- towards SGST in its annual return (GSTR-9) as far back as 01.04.2022 — well before the impugned order — but this payment had not been factored into the assessment.

Issues Involved

  1. Whether an assessment order passed without accounting for tax already paid by the assessee through its annual return (GSTR-9) prior to the order can be sustained.
  2. Whether the assessee's failure to respond to the show cause notice or attend personal hearings, and its non-filing of an appeal, should bar relief in writ jurisdiction.
  3. What conditions should attach to any remand where partial relief is granted despite the assessee's own procedural lapses.

Petitioner's Arguments

  • The petitioner brought to the Court's attention that it had already paid CGST and SGST of Rs.74,169/- each through GSTR-9 filed on 01.04.2022, well before the impugned order dated 22.02.2025, and that this payment had not been taken into account while passing the assessment.

Respondent's Arguments

  • The Additional Government Pleader represented the Department in the proceedings; the order does not record any specific factual dispute over the GSTR-9 payment figures placed before the Court.

Court Order / Findings

  • Considering that the petitioner's prior GSTR-9 payment had not been accounted for while passing the ex-parte order, the Court found merit in granting partial relief notwithstanding the petitioner's own lapses in not responding to the SCN or attending the personal hearings.
  • The Court quashed the impugned order dated 22.02.2025 and remitted the matter for fresh consideration on merits, conditional on the petitioner depositing 10% of the disputed tax amount within thirty days and filing a detailed reply to the original DRC-01 notice, treating the quashed order as an addendum to that notice.
  • Upon such compliance, the respondent was directed to consider the reply and pass a fresh reasoned order within three weeks of receiving the reply and proof of deposit; failure to comply within the stipulated periods would result in the writ petition being deemed dismissed in limine, restoring the original order's enforceability.

Important Clarification

  • Courts will grant partial relief and remand an ex-parte GST assessment where it is shown that tax already paid by the assessee (even through an annual return like GSTR-9) was not accounted for, even if the assessee otherwise failed to respond to the SCN or attend hearings.
  • Such conditional remand typically requires a 10% pre-deposit and a substantive reply to the original SCN within a fixed timeframe, with automatic reversion to the original order if the conditions are not met.
  • This reflects a self-executing structure increasingly used by the Madras High Court in ex-parte GST matters — relief is real but strictly time-bound and conditional.

Sections Involved

  • Section 73 of the CGST/TNGST Act, 2017 – the provision under which the demand order was passed and later remanded.
  • Form GST DRC-01 – the show cause notice format preceding the assessment, treated as revived for a fresh reply.
  • Form GSTR-9 (Annual Return) – the return through which the petitioner's prior tax payment was reflected, central to the partial relief granted.

Decision – In Favour of

Disposed of in part in favour of the assessee — the ex-parte order was quashed and remanded on strict conditions (10% pre-deposit and fresh reply), leaving the final outcome to the respondent's fresh order.

Case Details

Court: Madurai Bench of the Madras High Court
Case No.: W.P.(MD)No.21577 of 2025 with W.M.P.(MD)No.16678 of 2025
Coram: Hon'ble Mr. Justice C. Saravanan
Date of Order: 07.08.2025

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