GST Dept Must Grant Time Extension for Submitting Additional Documents When Sought: Madras HC [Read Order]

In a recent ruling, the Madras High Court has held that when a taxpayer requests an extension of time to submit additional documents in response to a show cause notice, the GST Department must grant a reasonable extension before finalizing the assessment order.

The petition was filed by Tvl Ashta Gold, formerly known as Tvl Rishab Distributor. It challenged the impugned GST assessment order dated 22.02.2025, the rejection of a rectification application, and the consequential demand notice dated 27.05.2025 issued by the Vepery Assessment Circle in Chennai.

The petitioner argued that although they had responded to the original show cause notice and a notice for personal hearing, they later sought an extension of time to file further supporting documents through a letter dated 19.02.2025.

However, this request was not considered, and the department went ahead and passed the assessment order without granting any additional time or a fresh hearing.

It was further contended that the absence of an opportunity to file the additional documents and the failure to grant a fair hearing amounted to a clear violationof the principles of natural justice.

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The petitioner therefore prayed for the setting aside of the order and a chance to present all necessary documents before a fresh decision is taken.

The State’s counsel argued that multiple opportunities had already been given and the petitioner failed to utilise them within the stipulated time, leaving the department with no option but to conclude the assessment proceedings.

However, the single bench of Justice Krishnan Ramasamy observed that although the authorities had provided notices and hearing opportunities, once the petitioner made a specific request for extra time to submit relevant documents, it was the duty of the department to grant reasonable time for proper compliance.

It observed that “In this case, there is no doubt that the respondent had provided number of opportunities to the petitioner. Normally, when the petitioner requested for extension of time to file their reply, the respondent was supposed to have acceded the said request by providing sufficient time for filing the reply.”

The bench provided a balanced view that the department provided ample opportunity to the assessee. However, when the request for time extension was sought, the department should have agreed to such demand.

As the petitioner was ready to deposit 25% of the disputed tax amount, the Court directed the department to set aside the impugned orders subject to this partial payment being made within four weeks.

The assessee/petitioner was permitted to file a fresh reply and submit all supporting documents within three weeks thereafter. It was further ordered by the GST officer to issue a clear notice for a fresh personal hearing and to pass a detailed speaking order on merits after granting the petitioner an opportunity to be heard.

The High Court also directed the Kotak Mahindra Bank to lift the attachment on the petitioner’s bank account once proof of the 25% payment is submitted, holding that the attachment could not be sustained once the assessment itself was set aside.

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