Facts of the Case

R.Vellaisamy challenged an assessment order dated 04.04.2025 (GSTIN 33ACXPV7218G1Z0/2023-24), by which the demand proposed in Form GST DRC-01 dated 24.12.2024 was confirmed. The petitioner had engaged a Chartered Accountant to represent him, and the Chartered Accountant had filed a reply on 25.03.2025 — a reply that was also under challenge in connected writ petitions (W.P.(MD) Nos. 22267 and 22268 of 2025). On perusal, the order for AY 2023-24 revealed that the petitioner had not given a proper reply through the Chartered Accountant, resulting in the confirmed assessment; the petitioner's bank account had also been frozen.

Issues Involved

  1. Whether an assessment confirmed on the basis of a demonstrably inadequate professional reply, where the taxpayer approached the Court before expiry of the appeal limitation period, warrants being set aside and remanded rather than relegating the taxpayer to a statutory appeal.

Petitioner's Arguments

  • The reply filed through the Chartered Accountant on 25.03.2025 was inadequate and did not properly address the show-cause notice, and the resulting impugned assessment order deserved to be quashed with a direction to redo the assessment within a fixed time frame.

Respondent's Arguments

  • The Government Advocate for the State Tax Officer and the Standing Counsel for the bank appeared; no serious objection was raised to the petitioner being granted a further opportunity given the deficient reply.

Court Order / Findings

  • Since the petitioner had approached the Court in time, before expiry of the period of limitation for filing a statutory appeal, the Court was inclined to set aside the impugned order rather than relegate him to the appellate remedy.
  • The impugned order was quashed and the matter remitted to the respondent to pass a fresh order within three months; the petitioner was directed to file a reply to the original show-cause notice within 30 days, with the quashed order itself to be treated as an addendum to the show-cause notice.
  • It was made clear that failure to comply with these conditions would be deemed as if the writ petition had been dismissed, leaving the Department free to proceed under the GST enactments; on compliance, the petitioner's frozen bank account was to be defreezed.

Important Clarification

  • Where an assessee's professional representative (a Chartered Accountant) files a demonstrably inadequate reply that leads to a confirmed demand, and the assessee approaches the High Court within the ordinary appeal limitation period, courts may set aside the order and treat it as an addendum to the original show-cause notice, allowing the assessee a genuine second opportunity to reply on merits, rather than confining the assessee to the appellate route.

Sections Involved

  • Section 73, CGST/TNGST Act, 2017 – determination of tax not paid for reasons other than fraud, and the confirmed demand following a Form GST DRC-01 notice.

Decision – In Favour of

Decided in favour of the Assessee. Order set aside and treated as an addendum to the SCN, with the bank account to be defreezed on compliance.

Case Details

  • Court: Madurai Bench of Madras High Court
  • Case No.: W.P(MD) No. 22266 of 2025 and W.M.P(MD) Nos. 17381 & 17382 of 2025
  • Coram: Hon'ble Mr. Justice C. Saravanan
  • Date of Order: 14 August 2025

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.