Facts of the Case

M/s.T.V.L.Lifna Exporters LLP challenged an assessment order dated 30.01.2025 passed by the Deputy State Tax Officer (ST)-2, Tuticorin, for the tax period 2020-21 (GSTIN 33AAHFL2174P1ZZ). The impugned order was preceded by a show cause notice in Form GST DRC-01 dated 24.11.2024, to which the petitioner failed to reply, resulting in the ex-parte assessment order.

Issues Involved

  1. Whether the ex-parte assessment order, passed for want of a reply to the DRC-01 notice, could be quashed and the petitioner granted a further opportunity.
  2. If so, on what terms such relief ought to be granted, consistent with the Court's settled practice in similar matters.

Petitioner's Arguments

  • The petitioner sought that the impugned assessment order be quashed and an opportunity be granted to reply to the show cause notice, so that a fresh order could be passed on merits.

Respondent's Arguments

  • The Additional Government Pleader did not seriously contest the relief in principle, leaving the terms of relief to the Court's discretion.

Court Order / Findings

  • The Court observed that, under similar circumstances, it has consistently come to the rescue of similarly placed persons by quashing ex-parte assessment orders on terms requiring payment of 25% of the disputed tax, and found no reason to take a different view.
  • The writ petition was disposed of by quashing the impugned order on terms, subject to the petitioner depositing 25% of the disputed tax in cash from the Electronic Cash Register within 30 days.
  • The petitioner was directed to file a reply within the same period, with the impugned order treated as an addendum to the notice; non-compliance would result in the writ petition being deemed dismissed.

Important Clarification

  • Where an assessee has suffered an ex-parte GST assessment for failure to respond to a DRC-01 notice, the Madurai Bench follows a consistent practice of restoring the opportunity to contest the matter on merits, conditioned on payment of 25% of the disputed tax.

Sections Involved

  • Section 73/74 of the CGST/TNGST Act, 2017 — governs assessment proceedings following a show cause notice in Form DRC-01.
  • Electronic Cash Register mechanism under the CGST/TNGST Rules, 2017 — the mode prescribed for the mandated pre-deposit.

Decision – In Favour of

Disposed of with directions, substantially in favour of the assessee — the ex-parte order was quashed and a fresh opportunity granted, conditioned on the pre-deposit.

Case Details

Madurai Bench of the Madras High Court; W.P(MD)No.22240 of 2025 with W.M.P(MD)Nos.17346 and 17348 of 2025; Coram: Justice C. Saravanan; Order dated 14.08.2025.

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