Not Reply to GST SCN due to Registration Cancellation, Order Passed: Madras HC grants Opportunity to Contest on Condition [Read Order]

In this case, the petitioner, Ramya Auto Spares, challenged an assessment order dated 20 August 2024, which confirmed the tax demand proposed in a notice issued earlier.

The petitioner argued that due to the cancellation of its GST registration on 31 December 2022, it remained unaware of the subsequent notices and the final order uploaded on the web portal, resulting in it being unable to respond within the prescribed time.

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During the hearing, the GST department counsel contended that the taxpayer had wrongly availed input tax credit and should not be allowed to use the excuse of a cancelled registration to evade its liability.

The State’s counsel added that the writ petition lacked merit since the statutory remedy of appeal was still available to the petitioner.

JusticeC. Sarvanan observed that although the petitioner failed to reply due to its own default in maintaining an active registration, an opportunity should still be given to contest the demand to ensure natural justice.

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Accordingly, the court set aside the impugned assessment order but imposed a condition: the taxpayer must deposit 25% of the disputed tax amount in cash with the department.

The bench further directed that the quashed order shall be treated as an addendum to the original show cause notice. The petitioner has been given 30 days to file a detailed reply, and the department has been directed to pass a fresh order on merits within three months thereafter.

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