Madras High Court Restores Dismissed GST Appeal Despite Delay: Key Takeaways for Assessees

Background of the Dispute

The matter in Muthu Vairam Export And Imports Vs Appellate Deputy Commissioner (CT) came before the Madras High Court as a writ petition challenging an appellate order dated 06.11.2024. The appellate authority had refused to entertain the assessee’s appeal solely on the ground that it was filed beyond the statutorily condonable delay period.

The original assessment had been completed ex parte under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017, primarily on account of alleged mismatch between GSTR-1 and GSTR-3B. The assessee sought interference by the High Court after being denied access to the appellate remedy on technical grounds of limitation.

Facts Leading to the Writ Petition

Ex Parte Assessment Under Section 73

  1. An assessment order was passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017.
  2. The order was made ex parte, meaning no effective representation or reply was considered from the assessee before finalization.
  3. A key issue addressed in the assessment order was an alleged mismatch between GSTR-1 and GSTR-3B, which had revenue implications for the assessee.

Cause for Delay in Filing Appeal

The assessee explained that:

  • A part-time accountant engaged by the assessee failed to respond to the show cause notice.
  • The same lapse led to non-filing of a timely appeal against the assessment order.
  • Due to this negligence, the appeal came to be lodged after expiry of the period which the appellate authority was legally empowered to condone.

Despite the delay, at the time of filing the appeal, the assessee had already deposited 10% of the disputed tax amount, reflecting bona fide intent to pursue the matter on merits.

Appellate Authority’s Decision

The appellate authority dismissed the appeal on 06.11.2024, taking the view that:

  • The appeal was lodged beyond the condonable limit of delay prescribed under the statute.
  • Once the outer limit of condonation is crossed, the authority has no jurisdiction to condone the delay.
  • Accordingly, the appeal was rejected at the threshold without examining the merits of the assessment.

Aggrieved by this rejection, the assessee approached the Madras High Court through a writ petition.

Submissions Before the High Court

Assessee’s Arguments

The learned counsel representing the assessee contended that:

  • The assessee had suffered an ex parte assessment under Section 73 owing to the default of a part-time accountant.
  • The said accountant did not file any reply to the show cause notice and also did not ensure filing of the appeal in time.
  • This constituted a sufficient and genuine cause for the delay, though technically it might fall beyond the condonable period before the appellate authority.
  • The assessee had already deposited 10% of the disputed tax at the time of filing the belated appeal, showing willingness to comply and contest the matter bona fide.
  • Considering the nature of issues involved (GSTR-1 vs GSTR-3B mismatch) and the fact that the assessment was ex parte, a substantive opportunity should be granted to contest the assessment on merits.

The counsel further requested the Court to mould the relief suitably, even if the original writ prayer did not exactly match the relief ultimately sought, so as to secure substantive justice.

Revenue’s Arguments

The learned Additional Government Pleader appearing for the respondents argued that:

  • Under the applicable statutor...