HC Quashes Ex Parte Order Despite Lapsed Appeal, Remands Subject to 25% Tax Deposit.

By | November 3, 2025
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HC Quashes Ex Parte Order Despite Lapsed Appeal, Remands Subject to 25% Tax Deposit.

Issue

Whether a High Court, in its writ jurisdiction, can set aside an ex parte assessment order (passed due to the taxpayer’s non-response to the SCN) and grant a fresh opportunity of hearing, even after the statutory deadlines for filing an appeal and a rectification application have expired, and if so, under what conditions.

Facts

  • An ex parte assessment order under Section 73 was passed against the petitioner for the period 2018-19.
  • The order recorded that the petitioner had failed to file any response to the Show Cause Notice (SCN).
  • The petitioner did not file a statutory appeal (under Section 107) or a rectification application (under Section 161) within the time limits prescribed by the Act.
  • After all statutory remedies were time-barred, the petitioner filed a writ petition in the High Court challenging the ex parte order on grounds of natural justice.

Decision

  • The High Court, following a “consistent view” it has taken in similar cases, quashed the impugned ex parte assessment order.
  • The matter was remanded back to the adjudicating authority for a fresh (de novo) assessment on merits.
  • This relief was granted subject to a stringent condition: the petitioner must deposit 25% of the disputed tax within 30 days.
  • The petitioner was also directed to file a comprehensive reply to the SCN (treating the quashed order as an addendum to the SCN) within the same 30-day period.
  • If the petitioner complies with these conditions, the authority must pass a fresh, reasoned order on merits within three months.
  • If the petitioner fails to comply with the 25% deposit, the authority is free to enforce the original order and recover the dues as if the writ petition had not been filed.

Key Takeaways

  • Writ Court as a Final Recourse: The High Court can exercise its writ jurisdiction to grant a fresh hearing in ex parte matters, even when all statutory appeal and rectification timelines have lapsed, to prevent a miscarriage of justice.
  • Relief is Conditional, Not Absolute: This discretionary relief is not granted for free. The court will often impose conditions that are stricter than the original statutory requirements to ensure the petitioner’s bona fides.
  • “Cost” of a Second Chance: The 25% deposit acts as a “cost” for the assessee’s initial failure to respond and subsequent failure to appeal in time. This is significantly higher than the standard 10% pre-deposit required for a timely appeal.
  • Default Clause: The order includes a default clause, which automatically revives the original demand if the taxpayer fails to meet the court’s conditions. This prevents the writ from being used as a mere tool for delaying recovery.
HIGH COURT OF MADRAS
JST Automations Robotic
v.
Deputy State Tax Officer
C. Saravanan, J.
WP No. 36094 of 2025
WMP Nos. 40340 and 40341 of 2025
SEPTEMBER  26, 2025
Manoharan S. Sundaram, P.Velammal, P.Baskaran, V.Thiyagarajan, D.Kaviya and P.Boobalan for the Petitioner. Ms. Amirtha Poonkodi Dinakaran, Government Adv. for the Respondent.
ORDER
1. Ms. Amirtha Poonkodi Dinakaran, learned Government Advocate takes notice for the Respondent.
2. This Writ Petition is being disposed of at the time of admission after hearing the learned counsel for the Petitioner and learned Government Advocate for the Respondent following the consistent view taken by this Court under similar circumstances.
3. In this Writ Petition, the Petitioner has challenged the impugned Assessment Order dated 25.04.2024 pursuant to a Show Cause Notice in GST DRC-01 dated 28.12.2023 for the Tax Period between April 2018 and March 2019.
4. The Petitioner has approached this Court long after the expiry of the limitation period prescribed both for filing an appeal against the impugned Assessment Order dated 25.04.2024 and to rectify the same under Section 161 of the respective GST enactments.
5. A reading of the impugned Assessment Order dated 25.04.2024 indicates that the Petitioner has not participated in the assessment proceedings by filing a reply to the Show Cause Notice in GST DRC-01 dated 28.12.2023 and therefore, the demand has been confirmed against the Petitioner.
6. It is submitted by the learned counsel for the Petitioner that the Petitioner be given one chance to substantiate the case. The demand has been confirmed against the Petitioner merely because the Petitioner failed to respond to the Show Cause Notice in GST DRC-01 dated 28.12.2023.
7. The learned Government Advocate for the Respondent on the other hand would submit that this Writ Petition is devoid of merits and is liable to be dismissed in the light of the decisions of the Hon’ble Supreme Court in Singh Enterprises v. CCE [2008] 12 STT 21 (SC)/(2008) 3 SCC 70 and in Commissioner of Customs and Central Excise v. Hongo India Private Limited (2009) 5 SCC 791 and also in Asstt. Commissioner (CT) LTU v. Glaxo Smith Kline Consumer Health Care Ltd. GSTL 305 (SC)/2020 SCC Online SC 440.
8. That apart, it is submitted that the Petitioner has not substantiated the case with any documents and therefore, on this count also, this Writ Petition is liable to be dismissed.
9. It is noticed that under similar circumstances, this Court has come to the rescue of the persons like the Petitioner by quashing the impugned Assessment Order on terms subject to the Petitioner depositing 25% of the disputed tax. I do not find any reason to take a different stand in this case.
10. Having considered the submissions made by the learned counsel for the Petitioner and the learned Government Advocate for the Respondent and having considered the consistent view taken by this Court in similar circumstances, this Court is inclined to come to the partial rescue of the Petitioner by quashing the impugned Assessment Order dated 25.04.2024 and remitting the case back to the Respondent to pass a fresh order de novo subject to the Petitioner depositing 25% 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.
11. The Petitioner shall file a reply contemporaneously to the Show Cause Notice in GST DRC-01 dated 28.12.2023 together with requisite documents to substantiate the case by treating the impugned Assessment Order dated 25.04.2024 as an addendum to the Show Cause Notice dated 28.12.2023 within a period of thirty (30) days from the date of receipt of a copy of this order.
12. In case the Petitioner complies with the above stipulated conditions, the Respondent shall proceed to pass a fresh order de novo on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months thereafter.
13. In case the Petitioner fails to comply with any of the conditions stipulated above, the Respondent is at liberty to proceed against the Petitioner in accordance with law as if this Writ Petition was dismissed in limine today. Thereafter, it is for the Respondent to take steps against the Petitioner to recover the tax that has been confirmed in the impugned Assessment Order.
14. Needless to state, before passing any such order, the Respondent shall give due notice to the Petitioner.
15. It is made clear that the Petitioner shall co-operate with the Respondent in the de novo proceedings.
16. Fresh assessment in the de novo proceedings shall be made without getting influenced by any of the observations, which preceded the Show Cause Notice in GST DRC-01 dated 28.12.2023.
17. This Writ Petition stands disposed of with the above observations. No costs. Connected Writ Miscellaneous Petitions are closed.