High Court Condones Delay and Remands Ex-Parte Order for Fresh Adjudication Subject to Total 25% Pre-Deposit

ISSUE

Whether the High Court can exercise its writ jurisdiction to remand a case for fresh adjudication when the statutory limitation period for filing an appeal under Section 107 has expired, particularly when the original order was passed ex-parte due to the assessee’s non-response.

FACTS

The Period: 2020-21.
The Default: The demand proposed in the Show Cause Notice (SCN) was confirmed by the Adjudicating Authority because the Assessee failed to file any reply.
The Delay: The Assessee missed the deadline to file a statutory appeal before the Appellate Authority (Section 107), and the limitation period (including the condonable period) had expired.
The Action: The Assessee filed a Writ Petition challenging the order, having already deposited/been debited 10% of the disputed tax.
Bank Attachment: The Department had initiated recovery measures, including attaching the bank account.

HELD

Consistent View: Following the consistent approach taken by the Court in similar cases (typically Madras High Court), the Court decided to grant the assessee one more opportunity to contest the tax demand on merits, despite the lapse of limitation.
Strict Condition (25% Deposit): The relief was conditional. The Assessee was directed to deposit 25% of the disputed tax.
- Since the Assessee had already paid/adjusted 10%, they were directed to pay the balance 15% to meet the 25% threshold.
Procedural Mechanism:
1. The impugned Assessment Order is to be treated as an Addendum to the Show Cause Notice.
2. The Assessee must file a detailed reply with documents within a stipulated time.
3. The Respondent must pass a fresh final order on merits after a personal hearing.
Recovery: Upon compliance with the deposit condition, the attachment of the bank account stands automatically vacated.
Verdict: [In Favour of Assessee / Matter Remanded]

KEY TAKEAWAYS

The “25% Solution”: This is a growing trend (especially in Madras/Telangana HCs) where Courts bypass the rigorous appeal limitation (3+1 months) if the assessee agrees to pay a higher pre-deposit (25-30%) instead of the standard statutory 10%. It acts as a penalty for negligence (ignoring the SCN) while preserving the right to be heard.
Order as SCN: By converting the “Impugned Order” into an “Addendum to SCN,” the Court effectively rewinds the clock to the adjudication stage, restoring the assessee’s opportunity to file a reply which was originally missed.
Bank Attachment: If your bank account is attached due to an ex-parte order, filing a Writ Petition with an offer to pay a substantial part of the demand is often the fastest way to get it released, compared to the long appellate route.

HIGH COURT OF ALLAHABAD

Agrim Wholesale (P.) Ltd.

State of U.P.^*

Piyush Agrawal, J.

WRIT TAX No. 6578 of 2025

DECEMBER 8, 2025

Dev Kaushik for the Petitioner. R.S. Pandey, Learned ACSC for the Respondent.

ORDER

1. Heard Mr. Dev Kaushik for the petitioner and Mr. R.S. Pandey, learned ACSC for the State-respondents.

2. By means of present petition, the petitioner is assailing the order dated 29.7.2025 and 3.5.2025.

3. Learned counsel for the petitioner submits that the petitioner is a proprietorship firm registered under the GST Act having GSTIN 09AATCA4488Q1ZG and involved in e-commerce business of wholesale trading and supplying wide range of agricultural inputs such as seeds, pesticides, fertilizers, insecticides, agricultural tools etc. He submits that the goods in question were intercepted and seized on 2.5.2025 only on the ground that Part B of the E-way bill accompanying with the goods was not generated thereafter the penalty order has been passed against which the petitioner has preferred an appeal, which has been dismissed by the impugned order dated 29.7.2025.

4. Learned counsel for the petitioner further submits that at the time of interception of the vehicle in question, all the requisite documents were produced and the goods were found as per the description mentioned in the tax invoice. He further submits that while passing the penalty order under section 129(3) of the GST Act, no reason has been assigned. He further submits that Part – B of the e-way bill could not be filled due to some technical glitch. He further submits that there was no intention to evade payment of tax. He further submits that all other documents were duly filled, except Part – B of the e-way bill and the authorities below have not whispered a word indicating intention of the petitioner to evade payment of tax.

5. In support of his submissions, he has placed reliance on the judgement of the Division Bench of this Court in Tata Hitachi Constrution Machinery Company (P.) Ltd. v. State of Uttar Pradesh (All)/Writ Tax No. 2148/2025, decided on 09.05.2025 as well as the judgements of this Court in Citykart Retail (P). Ltd. v. CCT (All)/Writ C No. 22285/2019, decided on 06.09.2022 and Roli Enterprises v. State of U.P. GST 11/81 GSTL 444 (All)/Writ Tax No. 937/2022, decided on 16.01.2024 as well as Single Judge Bench of this Court in Metloy Cast v. Additional Commissioner Grade 2 (All)/Neutral Citation No. 2025:AHC:121373.

6. Per contra, learned ACSC supports the impugned orders and submits that the goods were in movement and Part – B of the e-way bill was not duly filled and therefore, the proceedings have rightly been initiated against the petitioner but he could not dispute the legal proposition enumerated in the aforesaid judgements relied upon by the counsel for the petitioner.

7. After hearing learned counsel for the parties, the Court has perused the record.

8. The short issue involved in the present case is with regard to penalty under section 129(3) of the GST Act on the basis of non-filling of Part -B of the e-way bill. The record shows that the stand of the petitioner was that due to technical glitch, Part – B of the e-way bill could not be filled, but there was no intention to evade payment of tax as well as none of the authorities below has recorded any finding with regard to intention to evade payment of tax. The Division Bench of this Court in Tata Hitachi Constrution Machinery Company (P.) Ltd. (supra) has categorically held that non-filling of e-way bill will not attract penalty under section 129(3) of the GST Act. The same view has been reiterated by this Court in Citykart Retail (P). Ltd. (supra) and Roli Enterprises (supra). Further, the record reveals that due to technical error, Part – B of the e-way bill could not be filled, which has not been disputed at any stage.

9. In the light of the aforesaid facts, there was no intention of the petitioner to evade payment of tax, which would amount to levy of penalty under section 129(3) of the GST Act.

10. In view of the aforesaid facts & circumstances of the case, the impugned orders cannot be sustained in the eyes of law and same are hereby quashed.

11. The writ petition succeeds and is allowed.

12. The authority concerned is directed to refund any amount deposited by the petitioner in pursuance of the present proceedings initiated against the petitioner within a period of two months from the date of production of a certified copy of this order.