Case Law Details
Tvl. Sri Hari Enterprises Vs Assistant Commissioner (ST) (FAC) (Madras High Court)
Madras High Court has intervened in a case involving Tvl. Sri Hari Enterprises, a civil works contractor, setting aside an order from the Assistant Commissioner (ST) (FAC) that rejected the firm’s Goods and Services Tax (GST) appeal on grounds of procedural delay. The court directed the tax authorities to grant Tvl. Sri Hari Enterprises an opportunity to rectify the defects in its appeal, including the belated submission of a condonation of delay application.
The petitioner, a registered taxpayer under the TNGST/CGST Act, 2017, faced a show cause notice dated March 19, 2024, from the first respondent (Assistant Commissioner), alleging discrepancies in its GST returns for the financial year 2019-2020. Tvl. Sri Hari Enterprises submitted a detailed reply on April 9, 2024. However, on July 25, 2024, an order was passed confirming the discrepancies and raising demands for tax, penalty, and interest. The petitioner contended that its reply had not been properly considered.
Aggrieved by the assessment order, Tvl. Sri Hari Enterprises filed an appeal under Section 107 of the GST Act on November 7, 2024. This date, according to the petitioner, fell within the prescribed 120-day limitation period for filing appeals. However, a critical error occurred: the petitioner failed to file an application for condonation of delay alongside the appeal.
The second respondent (appellate authority) subsequently rejected the appeal via an impugned order dated April 4, 2025, specifically citing the delay in its submission. The petitioner argued that while the appeal was filed beyond the initial 90-day period, it was still within the condonable 30-day window allowed under the TNGST Act. Medical reasons were cited by the petitioner for the delay in filing within the initial 90 days. Following the appeal’s dismissal, the tax department initiated coercive recovery steps against the petitioner under Section 112 of the Act, prompting the writ petition to the High Court.
Judicial Precedent and Court’s Stance
During the High Court proceedings, the learned counsel for Tvl. Sri Hari Enterprises relied on a precedent set by the same court in Indian Potash Ltd., Vs. Deputy Commissioner (ST) GST Appeal. In that case, the court had held that an appeal cannot be rejected solely on the basis of “technical defects.”
The Madras High Court, after reviewing the submissions and records, acknowledged that the appeal was indeed filed beyond 90 days but within the condonable 30-day period under Section 107 of the GST Act. The court specifically noted the petitioner’s “erroneous” failure to enclose the condonation of delay application.
In its pronouncement, the court strongly reiterated the principle established in Indian Potash Ltd., emphasizing that “an appeal cannot be rejected on the ground of technical defects.” The court highlighted that “no doubt there is procedural irregularity in filing the appeal but such procedural irregularity should not defeat the petitioner’s right.” Affirming the well-settled legal maxim that “procedure is handmaid of justice,” the High Court concluded that Tvl. Sri Hari Enterprises deserved an opportunity to rectify the identified procedural defect.
Court’s Directive
Consequently, the impugned order dated April 4, 2025, was set aside. The court directed Tvl. Sri Hari Enterprises to re-present its appeal, this time explicitly including the application for condonation of delay. Upon re-presentation, the second respondent is mandated to entertain the appeal, calculating the limitation period from the date the original appeal was initially filed.
The writ petition was thus disposed of with these specific directions, without imposing costs, and all connected miscellaneous petitions were closed. The ruling underscores the judiciary’s commitment to ensuring substantive justice prevails over rigid procedural adherence in tax matters, particularly when the procedural lapses are rectifiable and do not prejudice the opposing party.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition has been filed for the issuance of a writ of certiorarified mandamus calling for the second respondent’s order dated 04.04.2025 and quash the same and further direct the second respondent to grant opportunity to the petitioner to rectify the defects in Appeal bearing ARN#AD331124010858B including by filing application for condonation of delay and further direct the first respondent not to take any coercive steps against the petitioner till then.
2. The petitioner is engaged in the business of civil works contracts and is a registered tax payer under the TNGST/CGST Act, 2017. While so, the first respondent issued a show cause notice dated 19.03.2024 under Section 74 of TNGST/CGST Act alleging certain discrepancies in the returns filed for the financial year 2019-2020. The petitioner submitted a detailed reply to the show cause notice on 09.04.2024. On 25.07.2024, an order was passed confirming the discrepancies and raising the demand for tax, penalty and interest. According to the petitioner, the proposal mentioned in the notice dated 19.03.2024 was confirmed without properly considering the reply submitted by the petitioner. Therefore, the petitioner preferred an appeal under Section 107 of the GST Act on 07.11.2024, which was within the prescribed 120 days limitation period. While preferring the appeal, the petitioner erroneously failed to file condonation of delay application along with the appeal. The second respondent vide impugned order dated 04.04.2025, rejected the petitioner’s appeal on the ground that there was a delay in submission of the appeal. According to the petitioner, the appeal was filed well within the limitation period under Section 107 of GST Act. It is the case of the petitioner that the appeal was filed beyond 90 days but within the W.P No.17504 of 2025 condonable period of 30 days under the TNGST Act. The appeal could not be filed within 90 days for medical reasons. After dismissal of the appeal by the first respondent, the second respondent proceeded to take coercive steps against the petitioner for recovery of demand in terms of Section 112 of the Act. The petitioner being left with no other remedy has approached this Court with the aforesaid prayer.
3. Learned counsel for the petitioner relying on the judgment of this Court in Indian Potash Ltd., Vs. Deputy Commissioner (ST) GST Appeal stated that the appeal was rejected on technical grounds and therefore, the impugned order deserves to be set aside.
4. I heard both sides and perused the materials placed on record.
5. Admittedly, the petitioner filed the appeal beyond 90 days but within a condonable period of 30 days under Section 107 of the GST Act. It appears that the petitioner erroneously filed the appeal without enclosing the Condonation of Delay application. Therefore, the second respondent rejected the petitioner’s appeal on the ground that the W.P No.17504 of 2025 appeal was filed belatedly. This Court in Indian Potash Ltd., Vs. Deputy Commissioner (ST) GST Appeal held that an appeal cannot be rejected on the ground of technical defects. No doubt there is procedural irregularity in filing the appeal but such procedural irregularity should not defeat the petitioner’s right. As it is well settled that procedure is handmaid of justice, I am of the view that the petitioner should be given an opportunity to rectify the defect.
6. In the light of the above discussion, the impugned order is set aside. The petitioner is directed to represent the appeal along with condonation of delay application and the second respondent on re-presentation of appeal, along with condonation of delay application, shall entertain the same by calculating the limitation from the date of filing of original appeal.
7. The writ petition is disposed of with the above directions. No costs. Consequently connected miscellaneous petitions are closed.
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