Telangana HC Allows Appeal Against GST Order Allegedly Ignoring Reply: Key Lessons for Assessees

Overview

The Telangana High Court, in Intech Analytical Instruments Vs Assistant Commissioner of Central Tax, dealt with a common grievance under GST – assessment orders being passed without proper consideration of the assessee’s reply to the show cause notice.

By order dated 22.04.2026, the Court declined to scrutinize the merits of the assessment under Article 226, but simultaneously ensured that the assessee’s right to pursue statutory remedies was fully protected. The Court granted liberty to file an appeal against the order issued in Form GST DRC-07 for FY 2020-21, even though there was a delay, and directed that such delay be examined sympathetically by the Appellate Authority.

This decision highlights the judicial trend of:

  • Insisting on exhaustion of the statutory appellate mechanism under the CGST Act, 2017;
  • Yet safeguarding the assessee’s right to be heard when there are allegations of breach of natural justice.

Factual Matrix

Parties and Period Involved

  • Petitioner / Assessee: Intech Analytical Instruments
  • Respondent: Assistant Commissioner of Central Tax
  • Tax period in dispute: April 2020 to March 2021

Impugned Proceedings

The writ petition was filed to challenge:

  • Show Cause Notice dated 23.11.2024; and
  • Assessment Order in Form GST DRC-07 dated 26.02.2025,
  • Passed under Section 73 of the Central Goods and Services Tax Act, 2017.

The petitioner’s central grievance was that the reply submitted to the show cause notice had allegedly not been looked into or discussed in the impugned order.

Grievance of the Assessee

The assessee asserted before the High Court that:

  • A detailed reply had been filed to the show cause notice;
  • The final order in Form GST DRC-07 made no effective reference to the reply;
  • As a result, there was a violation of principles of natural justice, particularly the right to a fair hearing and due consideration of submissions.

In effect, the assessee treated the situation as a case of “non-speaking order” or an order passed in complete disregard of its written defence.

The core legal question was:

Whether the High Court should exercise writ jurisdiction under Article 226 of the Constitution in a GST matter where:

  • The assessee alleges violation of natural justice (non-consideration of reply), and
  • A statutory appellate remedy is available under the GST law?

This brings into focus the long-settled principle that High Courts, in fiscal matters, generally require the assessee to adopt the statutory appellate hierarchy unless there are exceptional circumstances.

Arguments Advanced

Submissions on Behalf of the Petitioner

Counsel for the petitioner contended that:

  • The order in Form GST DRC-07 had been passed without considering the reply on record;
  • Such non-consideration amounts to a breach of principles of natural justice;
  • On this ground alone, the order was liable to be interfered with under writ jurisdiction.

However, during the course of hearing, the petitioner modified its relief strategy. Instead of pressing for quashing of the order on merits, counsel requested:

  1. Liberty to file an appeal against the impugned order; and
  2. A direction that any delay in filing the appeal be considered sympathetically by the Appellate Authority.

This approach shifted the focus of the writ from contesting the order itself to securing a fair opportunity to avail the appellate remedy despite delay.

Stand of the Department / Respondent

The learned Senior Standing Counsel for the Central Board of Indirect Taxes and Customs submitted that: