Failure to Reply to GST SCN: Madras HC Gives Assessee Second Chance, Orders Additional 15% Deposit and Fresh Adjudication [Read Order]
The assessee was directed to deposit an additional 15% of the disputed tax, over and above the 10% already paid, within 30 days.
GST - SCN - HC - Taxscan
GST - SCN - HC - Taxscan
The Madras High Court has granted a second chance to the assessee, which had faced a GST ( goods and services tax ) demand after failing to respond to a Show Cause Notice (SCN). The court directed to make the additional pre-deposit of 15%.
The Court quashed both the assessment order dated 16 September 2024 issued by the State Tax Officer and the appellate order dated 6 May 2025, which had dismissed the assessee’s appeal as time-barred, while granting a conditional opportunity for fresh adjudication.
The petitioner, Tvl.Cashewking Nut and Commodities was issued a GST DRC-01 SCN on 18 April 2023 for the tax period April 2022 to March 2023. However, no reply was filed, leading to a demand order in September 2024. Though the assessee later filed an appeal, it was submitted with a delay of 75 days, beyond the condonable limit. Consequently, the appellate authority rejected the appeal on technical grounds despite the petitioner having deposited 10% of the disputed tax.
Want a deeper insight into the Income Tax Bill, 2025? Click here
The petitioner, challenging both orders, argued that the demand had been confirmed solely due to its failure to reply to the SCN, without any merits-based examination.
Also Read:No AIFTA Benefit Without Valid Certificate: Madras HC Sets Aside CESTAT Order [Read Order]
The Revenue opposed the plea, relying on Supreme Court rulings such as Singh Enterprises v. CCE (2008), Hongo India Pvt. Ltd. (2009), and Glaxo SmithKline Consumer Health Care Ltd.(2020), to contend that once the statutory appeal period had lapsed, no relief could be granted.
After hearing both sides, Justice C. Saravanan noted the consistent approach of the Court in similar cases and decided to balance procedural rigour with substantive justice. The Court set aside the impugned orders but imposed conditions.
The assessee was directed to deposit an additional 15% of the disputed tax, over and above the 10% already paid, within 30 days. Thereafter, it must file a detailed reply to the SCN with supporting documents within 15 days.
The Court further ordered that after compliance, the assessing officer should pass a fresh order on merits within three months. It was also directed that the attachment of the assessee’s bank account would stand lifted once the conditions were met.
However, if the petitioner fails to meet the requirements, the Revenue was directed to enforce recovery as if the writ petition had been dismissed.
Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
