High Court Quashes GST Ex-Parte Order Passed After Business Closure; Treats Order as Addendum to SCN and Allows Fresh Reply

The Tvl Fashion Passion (petitioner)  filed a petition under Article 226 of the Constitution of India, praying the Madras High Court to issue a Writ of Certiorarified Mandamus, calling for the records on the files of The State Tax Officer (respondent) concerning dated 29/03/2024. and to quash the same as illegal and accordingly influence the respondent to consider the case afresh after providing an opportunity for a hearing and dispose of the case on facts.

Before the Madras High Court, the petitioner is against the challenged order, dated 29/03/2024 which has been passed in accordance with the issued notice in DRC 01 on 27/12/2023. In the mentioned notice, the personal hearing was fixed itself on 27/01/2024. The aforementioned notice has been followed with multiple personal hearing notices.

The particular case of the petitioner is that the petitioner had Shut down the business during January 2022. Afterwards, the petitioner’s registration was cancelled at his request and therefore, the petitioner did not notice that the petitioner had been issued with the aforesaid notice in DRC 01, dated 27/12/2023 and personal hearing notices, which have now concluded in the order.

The Experienced counsel for the petitioner drew the attention of the Madras High Court to the decisions of the High Court of Allahabad in the case of M/s. Ahs Steels Vs the Commissioner of State Taxes and others and M/s. Katyal Industries vs. State of UP and others. In reply, The Madras High Court made an agreement in the case of M/s Katyal Industries vs State of UP and others with views explained by the High Court of Allahabad.

By considering the same, The Madras High Court set aside the challenged order. and the petitioner is also ordered to file an answer to the show cause notice in DRC 01 dated 27/12/2023 within a time of 30 days from the date of receipt of a copy of this order.

The challenged order dated 29/03/2024 stands quashed and will be treated as an attachment to the show cause notice. The respondent must undertake to pass a fresh order on facts as quickly as possible, specifically within a time of three months after hearing the petitioner.

The court clears that, if the petitioner fails to satisfy the above-mentioned conditions, the respondents will be at liberty to proceed against the petitioner as the Writ petition was dismissed.