Facts of the Case

M/s Saroj Associates, a proprietary concern, suffered an assessment order dated 20 March 2024 under Section 74 of the TNGST Act, 2017. It discharged the tax liability on 1 April 2024 and interest on 4 April 2024, and filed a timely appeal on 17 April 2024. On wrong advice, believing it could settle the matter under the Amnesty Scheme announced by the Government in 2024, the petitioner withdrew that appeal, and on realising it would not qualify for the Amnesty Scheme, filed a fresh appeal on 21 March 2025, which was rejected as time-barred on 8 April 2025.

Issues Involved

  1. Whether the second, time-barred appeal could be entertained despite the earlier timely appeal having been withdrawn.
  2. Whether, given the tax and interest already stood discharged, the penalty imposed under Section 74 alone deserved reconsideration.

Petitioner's Arguments

  • The tax and interest liability had already been fully discharged; the earlier, timely appeal was withdrawn purely on erroneous advice regarding eligibility for the Amnesty Scheme, and the petitioner's underlying grievance regarding the penalty had never been substantively redressed.
  • The petitioner undertook not to press for refund of the tax already paid.

Respondent's Arguments

  • The rejection of the second appeal as time-barred could not be questioned in view of the settled position in Singh Enterprises v. CCE, (2008) 3 SCC 70, and CCE and Customs v. Hongo India (P) Limited, (2009) 5 SCC 791, that the appellate authority lacks power to condone delay beyond the statutory outer limit.

Court Order / Findings

  • While the dismissal of the second appeal as time-barred could not be faulted on settled Supreme Court authority, the Court noted that the petitioner had already discharged the tax and interest liability, and that its underlying grievance had never been substantively addressed.
  • Balancing the interest of the Revenue with that of the petitioner, the Court remitted the matter to the original authority for reconsideration limited to the penalty imposed under Section 74, to be completed within three months.

Important Clarification

  • Even where a second, belated appeal is correctly dismissed as time-barred under the strict Singh Enterprises/Hongo India line of Supreme Court authority, a Court exercising writ jurisdiction may still grant limited equitable relief – confined to reconsideration of the penalty component – where the tax and interest already stand discharged and the appeal was withdrawn on bona fide but mistaken advice.

Sections Involved

  • Section 74, TNGST Act, 2017 – demand and penalty for fraud/wilful suppression.
  • Section 107, TNGST Act, 2017 – statutory appeal and limitation.

Decision – In Favour of

Disposed of with directions, substantially in favour of the Assessee – the demand and dismissal of the second appeal stand, but the imposition of penalty under Section 74 is remitted for fresh consideration.

Case Details

  • Court: Madurai Bench of Madras High Court
  • Case No.: W.P.(MD) No. 17181 of 2025
  • Coram: Hon'ble Justice C. Saravanan
  • Date of Order: 25 June 2025

Link to Download the Order

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