Facts of the Case

Lakshmi Agencies, a proprietorship registered under GSTIN 33AGCPA9088N1Z3, was assessed for the year 2020-21 by an order dated 14.02.2025, preceded by a show cause notice in Form GST DRC-01 dated 26.11.2024 to which the petitioner had filed a reply. The petitioner missed the appeal deadline, including the condonable period which expired on 13.06.2025, and approached the Madras High Court (Madurai Bench) instead, contending that although the impugned order recorded that a personal hearing had been granted, it was never actually heard.

Issues Involved

  1. Whether a writ petition challenging a Section 73 assessment order can be entertained after expiry of the appeal period, including the condonable period.
  2. Whether an assessment order that records a personal hearing as having been granted, when none was in fact afforded, is vitiated for breach of natural justice.
  3. What relief is appropriate where the delay in challenging the order is only marginal.

Petitioner's Arguments

  • Despite the impugned order recording that a personal hearing was granted, the petitioner was in fact never heard, amounting to a violation of principles of natural justice.
  • The petitioner had missed the appeal timeline only marginally and had substantive submissions to make on merits.

Respondent's Arguments

  • The Additional Government Pleader appeared for the respondent; no specific rebuttal to the natural justice contention is recorded in the order.

Court Order / Findings

  • Since the delay in approaching the Court was only marginal, the Court was inclined to come to the petitioner's rescue by quashing the assessment order on terms.
  • The order was quashed subject to the petitioner depositing 25% of the disputed tax — 10% from the Electronic Cash Register and 15% from the Electronic Credit Ledger — within 30 days.
  • The petitioner was directed to file a reply to the original show cause notice within that time, the quashed order being treated as an addendum to the show cause notice.
  • The respondent was directed to pass a fresh order on merits as expeditiously as possible after hearing the petitioner.
  • Failure to comply with any condition would result in the writ petition being deemed dismissed, leaving the department free to proceed under the GST enactments.

Important Clarification

  • Even where the appeal period (including the condonable period) under Section 107 has fully expired, the Madras High Court (Madurai Bench) continues to grant conditional relief — quashing the assessment order as an addendum to the original show cause notice on payment of a percentage of disputed tax — where the delay in approaching the writ court is marginal and a natural justice concern (denial of an actually-availed personal hearing) is raised.

Sections Involved

  • Section 73, TNGST/CGST Act, 2017 — determination of tax and passing of assessment order.
  • Form GST DRC-01 — show cause notice preceding the assessment order.

Decision – In Favour of

Disposed of on terms, in favour of the Assessee (conditional quashing subject to 25% pre-deposit).

Case Details

Madurai Bench of Madras High Court; W.P(MD)No.22224 of 2025 and W.M.P(MD)No.17318 of 2025; Coram: Justice C. Saravanan; Order dated 19.08.2025.

Link to Download the Order

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