Case Law Details
Kaajal Agarwal Vs State Tax Officer (Madras High Court)
The writ petitions were heard and decided by the Madras High Court concerning rejection of a GST appeal on limitation and the underlying assessment for Financial Year 2019–2020. The petitioner challenged an assessment order dated 28.08.2024, passed on allegations of mismatch in Input Tax Credit between GSTR-1 and GSTR-3B and excess ITC claim. Although the petitioner had submitted a reply to the show cause notice disputing the mismatch, the assessing authority confirmed the demand of ₹65,37,201 along with interest and penalty without considering the reply.
Aggrieved, the petitioner filed a rectification application, which was rejected on 06.02.2025. Thereafter, an appeal was filed before the appellate authority on 07.03.2025 with a delay of 67 days. The appellate authority dismissed the appeal at the threshold on the ground of limitation. The petitioner approached the High Court seeking condonation of delay and a direction for adjudication of the appeal.
The Court noted that the delay occurred because the petitioner was pursuing the rectification application and found the explanation for the delay to be genuine. It held that dismissal of the appeal solely on limitation, without considering these circumstances, was not justified. Accordingly, the Court condoned the delay of 67 days in filing the appeal. The appellate authority was directed to take the appeal on record, subject to payment of 15% of the disputed tax demand (comprising 10% statutory pre-deposit and an additional 5% agreed by the petitioner) within two weeks.
The Court further directed that upon proof of payment, the Department should issue instructions to de-freeze the petitioner’s bank account forthwith. Consequently, the writ petition challenging rejection of the appeal was disposed of with directions, and the writ petition challenging the assessment order itself was dismissed. No order as to costs was passed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
W.P.No.20985 of 2025 has been filed by the petitioner challenging the rejection of appeal order dated 28.03.2025, passed by the 2nd respondent.
W.P.No.20991 of 2025 has been filed by the petitioner challenging the impugned assessment order dated 28.08.2024 passed by the 1st respondent, relating to the Financial Year 2019-2020.
2. Mr.T.N.C.Kaushik, learned Additional Government Pleader (Taxes), takes notice on behalf of the respondents.
3. By consent of the parties, the main writ petition is taken up for disposal at the admission stage itself.
4. Learned counsel for the petitioner would submit that the 1st respondent issued the show cause notice to the petitioner on 21.05.2024, alleging that there was a mismatch of Input Tax Credit in GSTR 1 and GSTR 3B and certain excess claim of ITC was effected by the petitioner for the Financial Year 2019-2020. In response to the said show cause notice, the petitioner submitted their reply on 26.08.2024, explaining that there is no mismatch of ITC. Without considering the reply of the petitioner, the 1st respondent proceeded to pass an order dated 28.08.2024, confirming the proposal of the said show-cause notice, thereby resulting in a demand of Rs.65,37,201/- along with interest and penalty.
5. He would further submit that aggrieved over the assessment order dated 28.08.2024, the petitioner filed the rectification application and the same was rejected by the 1st respondent vide order dated 06.02.2025. Therefore, the petitioner preferred an appeal before the 2nd respondent on 07.03.2025 with a delay of 67 days. However, the appeal got rejected vide order dated 28.03.2025, on the ground of limitation. Hence, he prayed to condone the delay and to direct the 2nd respondent to adjudicate the appeal, on any terms including any condition of additional pre-deposit.
6. Learned Additional Government Pleader appearing for the respondents would submit that subject to the leave of this Court, this writ petition may be disposed of and the orders whichever passed by this Court will be complied with.
7. Heard the learned counsel for the petitioner as well as the learned Additional Government Pleader appearing for the respondents and perused the materials available on record.
8. Considering the submission made by the learned counsel for the petitioner and the learned Additional Government Pleader appearing for the respondents, it appears that the 1st respondent had dismissed the appeal at the threshold on the ground of limitation. According to the petitioner, the petitioner filed the rectification application on 25.11.2024 itself and the 1st respondent rejected the same vide order dated 06.02.2025. Thereafter, the petitioner immediately preferred an appeal on 07.03.2025 and the delay of 67 days has occurred since the petitioner was pursuing the rectification application. The reason assigned by the petitioner for the delay in filing the appeal against the assessment order, appears to be genuine. Therefore, this Court is inclined to condone the delay of 67 days in filing the appeal against the impugned assessment order. Accordingly, this Court passes the following orders:
(i) The delay of 67 days in filing the appeal against the impugned assessment order dated 28.08.2024 is hereby condoned.
ii) The 2nd respondent/Appellate Authority is directed to take the appeal on record without insisting upon the limitation aspect, subject to the payment of 5% of the disputed tax demand as agreed by the petitioner in addition to 10% statutory pre-deposit, i.e totally 15% of the disputed tax amount in respect of the impugned assessment period, within a period of two weeks from the date of receipt of a copy of this order.
(iii) Upon production of proof with regard to the payment of 15% of the disputed tax made by the petitioner, the respondents-Department is directed to issue appropriate direction on the petitioner’s banker towards de-freezure of the petitioner’s bank account forthwith.
9. With the above directions, the writ petition in W.P.No.20985 of 2025 is disposed of.
10. In view of the order passed by this Court in W.P.No.20985 of 2025 by setting aside the rejection of appeal order dated 28.03.2025 passed by the 2nd respondent, the writ petition in W.P.No.20991 of 2025 is hereby dismissed. No costs. Consequently, the connected miscellaneous petitions are also closed.
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