Ex-parte GST assessment order quashed on consent and remanded for fresh adjudication subject to a twenty-five percent pre-deposit.

By | June 4, 2026
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Ex-parte GST assessment order quashed on consent and remanded for fresh adjudication subject to a twenty-five percent pre-deposit.

Issue

Whether an ex-parte assessment order passed under Section 73 can be set aside and remanded for fresh adjudication on merits through a writ petition, when the petitioner has failed to respond to the Show Cause Notice, missed the personal hearing, and allowed the statutory appeal limitation period to expire.

Facts

  • The petitioner challenged a final GST assessment order passed under Section 73 of the Central Goods and Services Tax Act, 2017 / Tamil Nadu Goods and Services Tax Act, 2017.

  • Prior to passing the order, the tax authority issued a statutory Show Cause Notice (SCN) in Form GST DRC-01, requesting a formal reply and offering an opportunity for a personal hearing.

  • The petitioner neither filed a written reply to the SCN nor appeared for the personal hearing, which led the respondent to pass an ex-parte assessment order.

  • The petitioner failed to file a regular statutory appeal against this assessment, and the limitation period for filing such an appeal had expired long before the writ petition was moved.

  • During the writ proceedings, both parties consented to a conditional fresh determination of the tax liability.

Decision

  • Despite the expiration of the statutory appeal period, the High Court set aside the impugned ex-parte order and remitted the matter for fresh adjudication on its merits.

  • The remand was made strictly conditional upon the petitioner depositing 25% of the disputed tax demand within 30 days, either in cash or through the electronic cash ledger.

  • The petitioner was directed to submit a comprehensive reply to the SCN along with all supporting documents within the same 30-day timeline, treating the quashed assessment order merely as an addendum to the SCN.

  • Upon compliance with the pre-deposit and reply conditions, the respondent was directed to pass a fresh final order within a preferred timeline of three months, ensuring due notice is given to the petitioner.

  • The court ruled that any existing bank account attachments would be lifted upon making the deposit, provided there were no tax arrears for other periods. If the petitioner fails to comply with the conditions, the Revenue is free to recover the full dues.

Key Takeaways

  • Conditional Relief Beyond Limitation: Writ courts can exercise extraordinary jurisdiction to revive an expired tax dispute and grant a fresh hearing to a negligent taxpayer, but such equity is often conditional upon making a substantial financial pre-deposit.

  • Ex-Parte Assessment Status on Remand: When a matter is remanded for a fresh trial, the original ex-parte assessment order loses its finality and is legally treated as a supplementary annexure or addendum to the original Show Cause Notice.

  • Conditional Attachment Vacancy: A bank attachment executed to secure tax dues can be set aside by judicial order as long as the taxpayer satisfies the court-mandated deposit fraction and has a clean compliance record for separate tax windows.

HIGH COURT OF MADRAS
P. Sankar Lorry Body Labour Works
v.
Deputy State Tax Officer II
C. Saravanan, J.
W.P. Nos. 16494, 17671 and 17673 of 2026
APRIL  30, 2026
Abishek A.M. for the Petitioner. T.N.C. Kaushick, Special Government Pleader for the Respondent.
ORDER
1. Heard the learned counsel for the Petitioner and the learned Additional Government Pleader for the Respondent.
2. In this Writ Petition, the Petitioner has challenged the impugned Order dated 10.11.2025, which was preceded by a Show Cause Notice in GST DRC-01 dated 14.08.2025 wherein the Petitioner was called upon to file a reply and to appear for a personal hearing. However, the Petitioner did not take advantage of the same and has thus, suffered the impugned Order dated 10.11.2025.
3. 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 long before. However, the present Writ Petition has been filed only on 01.04.2026.
4. At this stage, the learned counsel for the Petitioner submits that the Petitioner is willing to pre-deposit 25% of the disputed tax as a condition for denovo adjudication.
5. The learned counsel for the Petitioner has also made an endorsement to that effect in the Court bundle, which is extracted hereunder:-
” Agreed to pay 25% of deposit”
6. Recording the above consent, the case is remitted back to the Respondent to pass a fresh order on merits subject to the Petitioner depositing 25% of the disputed tax in cash or 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 GST DRC-01 dated 14.08.2025 together with requisite documents to substantiate the case by treating the impugned Order dated 10.11.2025 as an addendum to the Show Cause Notice dated 14.08.2025.
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 if any, shall also stand automatically vacated.
9. It is made clear that bank attachment shall be lifted subject to the Petitioner depositing 25% of the disputed tax as ordered above and the Petitioner not being in arrears of any other amount for any other tax period 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.
Category: GST