Madras High Court Grants Conditional Relief in GST Case Despite Delay by Taxpayer

Numerous times, the taxpayers do not file any written reply to the show-cause notices issued to them, which ultimately leads to the issuance of a final order. Even after receiving the order, they do not file an appeal challenging it timely manner. This leads to the issuance of further legal actions against them. Here also, the same thing happened, but still the court decided to provide some relief to the taxpayer, but on certain conditions.

The present Writ Petition [W.P. No. 20909 of 2025], dated July 30, 2025, is filed by a company named M/s. Teddy Exports (petitioner) in the Madras High Court under Article 226 of the Indian Constitution against the Superintendent of GST and Central Excise (respondent). The company here is challenging a GST assessment order (Order-in-Original No. 06/2024-GST dated 13.03.2024) and the following rectification order dated 26.09.2024, because they believe these orders are illegal and lack merit. They also want the GST department to reconsider the assessment properly and according to the law.

Previously, the company was issued the Show Cause Notice (SCN) on 27.12.2023 (SCN No. 64/2023-GST) by the GST authorities. However, the company did not file any written reply to it. Following this, the GST department issued the final order after a personal hearing.

When the court analysed both sides, it noted that the company did not file any written reply to the SCN dated 27.12.2023. Despite this, the GST authorities continued with the assessment and held a personal hearing on 22.02.2024. The assessment order was passed even though no written response was submitted by the company.

As the petitioner failed to reply to the SCN, an adverse order was passed. The court notes that the company had another legal remedy available to challenge this order by filing an appeal before the Joint Commissioner of Central Excise (Appeals) under Section 107 of the GST law. But the company even missed that deadline to file an appeal and approached the court late.

Despite the petitioner’s carelessness and failure to respond or appeal timely manner, the court is willing to provide some relief, citing the previous judgements related to the same issue, where the courts quashed the GST orders and remanded the case to the respective authorities for fresh reconsideration, but with some conditions. Here, the company is asked to pay 25% of the disputed tax amount within 30 days of receiving this order. If the company complies with the condition, the court will quash the GST orders and treat them as just a corrigendum to the original show cause notice. The company is then required to submit a written reply to the SCN within 30 days. Then, the GST authorities, on receiving the reply, must consider the case afresh and pass the new order on its merits within three months.

Note: If the company fails to deposit the disputed tax amount of 25% or file a written reply before the stated date, then the GST authorities are free to enforce the original assessment orders.