GST Appeal Restored as Madras HC Allowed Statutory Remedy on Additional Deposit

Kavithalaya Steels Vs Appellate Authority (Madras High Court)

The Madras High Court disposed of a writ petition challenging an Assessment Order dated 27.04.2024 issued in Form GST DRC-07 for the financial year 2018-19 and the subsequent Rectification Order dated 23.12.2024 rejecting the petitioner’s rectification application filed on 26.07.2024.

The assessment order had been preceded by a Show Cause Notice in DRC-01 dated 29.12.2023. The petitioner did not submit a reply to the show cause notice, resulting in the assessment order confirming a tax demand of ₹19,40,368 and penalty of ₹1,94,036, aggregating to ₹21,34,404.

Before the High Court, the petitioner submitted that since the rectification application had been rejected, liberty should be granted to pursue the statutory appellate remedy against the assessment order. The petitioner also stated that an amount of ₹5,75,646 had already been paid towards the disputed tax liability of ₹19,40,368. The Government Advocate, however, was unable to confirm this payment based on the available records.

Taking note of the submissions and following the consistent approach adopted in similar matters, the Court granted liberty to the petitioner to file a statutory appeal before the Appellate Authority along with supporting documents to substantiate its defence. This liberty was made conditional upon the petitioner depositing 25% of the disputed tax, over and above the amount already paid, within 30 days from receipt of the order.