GST Order Issued without Applying Mind to Reply of Assessee Must be Quashed : Madras HC [Read Order]
The High Court held that such mechanical disposal of the case without appreciating the defense offered by the assessee amounted to a violation of the principles of natural justice
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The Madras High Court has ruled that the GST (Goods and Services Tax) order issued without applying the mind to the reply filed by the assessee must be quashed. The court noted that the order was non-speaking. The petitioner, Rethinsamy Mahalingam, proprietor of M/s Classic Agencies and a registered taxpayer under GST, had filed the writ petition challenging the assessment order...
The Madras High Court has ruled that the GST (Goods and Services Tax) order issued without applying the mind to the reply filed by the assessee must be quashed. The court noted that the order was non-speaking.
The petitioner, Rethinsamy Mahalingam, proprietor of M/s Classic Agencies and a registered taxpayer under GST, had filed the writ petition challenging the assessment order dated 03.02.2025 for the financial year 2017-18.
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The impugned order was passed under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017, pursuant to a Show Cause Notice (SCN) issued in Form GST DRC-01 on 31.12.2023, and a prior intimation in Form DRC-01A dated 19.09.2023 under Section 73(5).
In response to the SCN, the petitioner had submitted a reply denying the allegations and explaining the records. However, the order passed by the State Tax Officer claimed that the petitioner had failed to respond to the queries raised in the SCN and had not submitted necessary documents such as original invoices or certificates under Circular No. 183/2022 dated 27.12.2022.
Justice C. Saravanan, observed that the adjudicating officer failed to apply his mind to the petitioner’s reply. The order, according to the Court, was a non-speaking one; it neither acknowledged the contentions raised by the petitioner nor provided any substantive reasoning to rebut those claims.
The High Court held that such mechanical disposal of the case without appreciating the defense offered by the assessee amounted to a violation of the principles of natural justice. It stated that when a reply is filed, the adjudicating authority is duty-bound to consider and discuss it while passing the final order.
The matter was remanded back to the department and directed to pass fresh, reasoned order after affording the petitioner a proper opportunity of hearing, preferably within a period of three months. The petitioner was directed to submit a comprehensive reply within 30 days of receiving the Court’s order.
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