Writ Court remands matter despite expiry of Appeal limitation; 10% pre-deposit ordered

Issue

Whether the High Court can exercise its writ jurisdiction to remand a matter for fresh adjudication when the petitioner failed to file a statutory appeal within the limitation period under Section 107, and whether such relief can be granted subject to a pre-deposit condition to vacate recovery proceedings.

Facts

Period: 2021-2022.
The Default: A Show Cause Notice (SCN) in Form GST DRC-01 was issued proposing a demand under Section 73 (non-fraud cases). The petitioner failed to attend the personal hearing.
The Order: Consequently, an ex-parte assessment order was passed, and recovery proceedings were initiated via Form GST DRC-07, leading to the attachment of the petitioner’s bank account.
Limitation Expired: The petitioner did not file an appeal within the statutory time limit prescribed under Section 107. Since the appellate remedy was time-barred, they filed a Writ Petition.

Decision

Consistency in Relief: The High Court noted that in similar matters where the appeal remedy was lost, the Court had remitted cases back to the Adjudicating Authority to ensure natural justice, subject to terms.
Remand Conditions: The Court set aside the recovery proceedings and remanded the matter for a fresh order, subject to the following strict conditions:
1. 10% Pre-deposit: The petitioner must deposit 10% of the disputed tax amount.
2. Mode of Payment: This deposit must be made from the Electronic Cash Ledger (Cash payment) within 30 days.
Procedural Safeguard: The impugned assessment order is to be treated as an addendum to the Show Cause Notice. This allows the petitioner to file a comprehensive reply addressing the findings in the order.
Bank Attachment: Upon compliance with the deposit condition, the bank attachment shall stand vacated.
Ruling: The matter was remanded for a fresh decision on merits after providing a personal hearing.

Key Takeaways

Bypass Limitation via Writ: When the strict timeline for filing a GST appeal (3 months + 1 month condonation) expires, the Appellate Authority cannot accept the appeal. However, High Courts often exercise extraordinary jurisdiction to restore the case if the assessee agrees to pay the mandatory pre-deposit (usually 10%).

“Order as Addendum”: This is a favorable mechanism for taxpayers. Instead of the order being final, it is treated as a detailed notice. This gives the taxpayer a second chance to rebut the specific findings that were confirmed in the ex-parte order.

Cash vs. Credit: Courts frequently specify that the pre-deposit in such writ remands must be paid via the Electronic Cash Ledger, preventing the use of disputed ITC balance for this purpose.

HIGH COURT OF MADRAS

Tvl. Jayam Tex

Assistant Commissioner (ST)

C.Saravanan, J.

W.P.No.45353 of 2025
W.M.P.Nos.50514 and 50516 of 2025

NOVEMBER 20, 2025

Devanandan for the Petitioner. T.N.C.Kaushik, Addl. Govt. Pleader for the Respondent.

ORDER

1. Mr.T.N.C.Kaushik, learned Additional Government Pleader takes notice for the Respondent.

2. This Writ Petition is being disposed of at the stage of admission itself with the consent of the learned counsel for the Petitioner and the learned Additional Government Pleader for the Respondent.

3. In this Writ Petition, the Petitioner has challenged the impugned Order bearing Reference No. GSTIN: 33AQPPJ2047R1ZB/2021-2022 along with consequential Order in Form GST DRC-07 dated 30.06.2025 of the Respondent, which was preceded by a Show Cause Notice in Form GST DRC-01 dated 24.05.2025 wherein the Petitioner was called upon to appear for personal hearing. However, the Petitioner had not taken advantage of the same and thus, suffered the impugned Order dated 30.06.2025.

4. It is noticed that the limitation for filing an appeal under Section 107 of the respective GST enactments, 2017 against the impugned Order has already expired. The present Writ Petition has been filed only on 19.11.2025.

5. Under similar circumstances, Orders have been quashed and cases have been remitted back to pass a fresh order on terms subject to such Assessee depositing 10% to 100% of the disputed tax depending upon the length of delay in approaching the Court. I do not find any reason to take a different view in this case.

6. Therefore, to balance the interest of both parties viz., the Assessee and the Revenue, the case is remitted back to the Respondent to pass a fresh order subject to the Petitioner depositing 10% of the disputed tax in cash from the Petitioner’s Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order.

7. Within such time, the Petitioner shall also file a reply to the Show Cause Notice in Form GST DRC-01 dated 24.05.2025 together with requisite documents to substantiate the case by treating the impugned Order dated 30.06.2025 as an addendum to the Show Cause Notice dated 24.05.2025.

8. In case the Petitioner complies with the above stipulations, the Respondent shall proceed to pass a final order on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months of such reply/pre-deposit. Subject to the Petitioner complying with the above stipulations, the attachment of the bank account of the Petitioner shall also stand automatically vacated.

9. It is made clear that bank attachment shall be lifted subject to the deposit of 10% of the disputed tax as ordered above and no other amount is in arrears barring the amount demanded under the impugned Order.

10. In case the Petitioner fails to comply with any of the stipulations, the Respondent is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine today.

11. Needless to state, before passing any such order, the Respondent shall give due notice to the Petitioner.

12. This Writ Petition stands disposed of with the above observations.

No costs. Connected Writ Miscellaneous Petitions are closed.