GST Orders Quashed! HC Slams Officer for Dismissing Reply as "Not Brief" Without Reason:

GST Orders Quashed! HC Slams Officer for Dismissing Reply as "Not Brief" Without Reason The Court found that the tax department had acted unfairly and carelessly by not looking at the replies or the reasons of the petitioner. Hence, the Court quashed all the tax and penalty orders and remanded the matter to the department for fresh consideration. HC directs the tax department to, at this time, properly consider the replies of the petitioner before issuing the final order.

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The current case revolves around three Writ Petitions (W.P. Nos. 28076, 28079, and 28080 of 2025) filed by an individual named Tvl. K.K. Hariharan in the Madras High Court. In all three writ petitions, the respondent is the same, i.e., the State Tax Officer, Roving Squad 3, from the Office of the Commercial Tax Officer, Coimbatore. Hariharan filed these three writ petitions under Article 226 of the Constitution of India. Through the writ petition, Hariharan challenged certain Goods and Services Tax (GST) assessment orders, related to the assessment years 2020-21, 2022-23, and 2023-24, issued by the tax officer. These orders included:

• Three assessment orders dated 21.01.2025 and 03.02.2025
• The DRC-07 demand notices issued under Section 73 of the CGST Act
• The rectification orders dated 18.07.2025
• The DRC-08 penalty orders dated 18.07.2025

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The petitioner was issued Show Cause Notices (SCNs) dated 11.06.2024 and 25.11.2024 by the tax officer. Hariharan replied to these notices on 11.07.2024 and 23.12.2024. Even after replying to the notices, the tax officer continued sending reminder notices to him and later passed the assessment orders without properly considering replies of Hariharan. The orders were passed in a careless manner, simply confirming the initial proposal in the SCNs. When Hariharan filed rectification petitions, the tax officer still imposed penalties without giving proper reasoning. Most importantly, the tax officer rejected the replies by simply stating, "The taxpayer's reply is not acceptable. The reply was not furnished briefly." When the high court deeply analysed the case, it found that even though the tax officer copied and pasted the replies given by the petitioner in the final assessment orders, they did not actually evaluate the content of the reply. Additionally, the tax officer failed to give reasons for rejecting the replies. This indicates a lack of application of mind before issuing the final order and a violation of natural justice, as the petitioner’s arguments were not addressed.

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Therefore, in the final ruling, the high court quashed the assessment orders for all three years. The Court remanded the matters to the tax officer for fresh consideration. The tax officer must now thoroughly go through the replies submitted by Hariharan and give a proper notice of 14 days. Directed the tax officer to this time, give the petitioner a fair chance to represent their side and then pass a speaking order. Since the original assessment orders are cancelled, the rectification and penalty orders are also automatically cancelled.