AIMS Engineers Vs Deputy State Tax Officer (Madras High Court)
Summary : The petitioner challenged an order dated 23.08.2024 after unsuccessfully seeking rectification under Section 161 of the GST enactments through multiple applications filed between November 2024 and April 2025, all of which were rejected. The impugned order was preceded by a DRC-01 notice dated 23.05.2024, with a hearing scheduled on 30.05.2024. A reminder was issued on 10.08.2024, to which the petitioner replied on 16.08.2024. The final order confirming tax liability was passed on 23.08.2024.
The petitioner sought quashing of the order, stating they had a fair case and that their bank account was attached on 03.09.2025, halting operations. Alternatively, they requested liberty to file an appeal since earlier attempts under Section 161 failed. The impugned order confirmed a tax demand of Rs.11,33,488 for April 2019–March 2020, along with interest of Rs.8,96,605 and a penalty of Rs.1,23,338, totaling Rs.21,53,431.
The Court observed that although the petitioner replied to the reminder, they were not granted a personal hearing before the order was issued. However, it also noted that the petitioner prolonged proceedings by repeatedly invoking Section 161, which is limited to rectifying apparent errors. The Court directed the petitioner to deposit the disputed tax of Rs.11,33,488 within 30 days. Upon deposit, the petitioner must be given a hearing, allowed to submit documents, and the matter remitted for fresh adjudication within six months. Failure to comply allows authorities to proceed as if the writ were dismissed.
