Erroneous GST Filing by Former Auditor: Madras HC directs Udhagamandalam Municipality Commissioner to Appear Before AO [Read Order]

The Madras High Court has set aside a GST ( Goods and Services Tax ) assessment order passed under Section 63 of the Tamil Nadu Goods and Services Tax Act, 2017, against the Udhagamandalam Municipality, owing to an inadvertent error in return filing by its previous auditor.

The Court held that the order was passed without properly notifying the petitioner and without affording them a meaningful opportunity to be heard.

The petitioner, represented by the Commissioner of Udhagamandalam Municipality, had challenged the assessment order dated 21.02.2025.

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It was contended that the impugned order arose solely due to the incorrect filing of GST returns by the Municipality’s former auditor. Further, the Court noted that the notice preceding the order was posted in the “Additional Notices” tab of the GST portal, a section often overlooked and not prominently displayed. This lack of visibility, combined with the absence of physical or direct communication, led the petitioner to miss the notice entirely.

The Court found that the petitioner had already paid more than 25% of the demand amount, indicating a bona fide effort to comply with tax obligations. Recognizing that the lapse was neither willful nor malicious, the Court decided in favor of granting an opportunity to rectify the error.

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Justice G.R. Swaminathan, presiding over the matter, quashed the impugned assessment order and remanded the case back to the Assessing Officer. The petitioner was directed to appear before the officer on 10.06.2025 at 4:00 PM, and was granted liberty to submit corrected GST returns and place all relevant materials on record.

The Court further directed the Assessing Officer to provide the Municipality with a proper opportunity of hearing and, after due consideration, pass a fresh assessment order strictly in accordance with law. The writ petition was accordingly allowed, and all pending miscellaneous petitions were closed.

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