Madras High Court Quashes GST Orders Over Violation of Natural Justice

The present writ petition (W.P. No. 23701 of 2025) is filed by the company named M/s. Sri Srinivasa Farm Service (petitioner), located in Salem, Tamil Nadu, before the Madras High Court. The company filed the petition because it was dissatisfied with a decision made by the State Tax Officer from the Commercial Taxes Department.

What Is the Writ Petition About?

The company filed this petition asking the High Court to quash two orders issued by the tax officer:

The initial order dated 22.02.2025 was passed after the officer issued a notice.

A rejection order dated 22.05.2025, where their application for rectification of the earlier order was rejected.

Both orders were related to the GST compliance of the company and were related to the financial year 2020-2021.

On 25.11.2024, the Tax Officer issued a notice in Form DRC-01 to the company. The company responded to the notice with their replies and documents on 25.12.2024 and 20.02.2025.

However, despite submitting the required documents, the officer issued the final order on 22.02.2025 without even properly listening to the side of the petitioner. Then, when the company tried to get the order corrected by filing a rectification application, it was also rejected on 22.05.2025.

What Was the Company’s Complaint in Court?

The company served the following arguments in the court:

The officer did not consider the reply and supporting documents.

Additionally, no personal hearing was given to the petitioner before passing the final order; hence, the released order is an ex parte order.

This is illegal as per the law, as it is a violation of “principles of natural justice,” meaning they should have been given a fair chance to represent their side.

Because of this, their bank account was frozen, which they wanted the court to unfreeze.

What Did the Respondent’s Lawyer Say?

The respondent’s advocate, representing the tax officer, argued that the officer did consider the replies of the petitioner before passing the final order. However, the judge examined the documents and facts of the case carefully.

What Did the Judge Say?

The Judge, Hon’ble Mr. Justice Krishnan Ramasamy, observed the following:

Even though the company submitted replies to the notice, there is no legal evidence that the officer considered these replies properly.

No valid explanation or reasoning was given in the final order about why the company’s response was rejected.

Also, the company was not given a chance to explain its side in person, which is a serious mistake and goes against the basic rules of fairness and justice.

Court’s Final Order:

The judge, Hon’ble Mr. Justice Krishnan Ramasamy, quashed both the orders, the main order dated 22.02.2025, and the rejection of rectification dated 22.05.2025.

The court gave the following directions:

The company must submit their reply and all necessary documents again within the time period of two weeks of receiving the court’s order.

After receiving the reply, the tax officer must give them a personal hearing and then pass a new, fair order based on the facts and merits of the case within eight weeks.

The frozen bank account should be unfrozen immediately so that the company can continue its operations.