Case Details
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Case Title: M/s. Kaajal Agarwal v. State Tax Officer & Deputy Commissioner (CT) (GST Appeal)
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Court: High Court of Judicature at Madras
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Petition Numbers: WP Nos. 20985 & 20991 of 2025, WMP Nos. 23716, 23715, 23723 & 23724 of 2025
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Date of Judgment: 16.06.2025
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Coram: Hon’ble Justice Krishnan Ramasamy
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Relevant Sections: Section 73 & Section 107, Tamil Nadu GST Act, 2017; corresponding provisions of CGST Act, 2017
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Category: Input Tax Credit (ITC), Appeal limitation, Pre-deposit
Facts of the Case (Paras 4–5)
The petitioner, M/s Kaajal Agarwal, was issued a show cause notice dated 21.05.2024 alleging mismatch in ITC between GSTR-1 and GSTR-3B for FY 2019–20, resulting in an alleged excess claim. Despite submitting a reply on 26.08.2024 contesting the mismatch, the State Tax Officer passed an order dated 28.08.2024 confirming a demand of ₹65,37,201/- with interest and penalty.
The petitioner filed a rectification application on 25.11.2024, which was rejected on 06.02.2025. Thereafter, an appeal was filed on 07.03.2025 before the Appellate Authority with a delay of 67 days. The appeal was dismissed on 28.03.2025 solely on the ground of limitation.
Questions before the Court
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Whether the rejection of appeal for a 67-day delay in filing could be sustained when the petitioner was pursuing rectification in good faith?
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Whether the appeal should be restored on merits subject to conditions of pre-deposit?
Observations (Paras 6–8)
The Court noted that the delay arose because the petitioner was bona fide pursuing the rectification application before the same authority. This was considered a genuine reason for delay. The Court further emphasized that such matters should not be dismissed mechanically on limitation grounds when there is evidence of due diligence.
The Court also balanced revenue interests by directing the petitioner to pay an additional 5% deposit (over and above the statutory 10%), totaling 15% of disputed demand, as a condition for condonation.
Judgment (Paras 8–10)
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The delay of 67 days in filing the appeal was condoned.
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The appellate authority was directed to admit the appeal without rejecting it on limitation grounds, subject to the petitioner depositing 15% of the disputed demand within two weeks.
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Upon proof of payment, the department was directed to issue instructions to the petitioner’s banker to de-freeze the bank account.
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WP No. 20985 of 2025 was allowed with directions, while WP No. 20991 of 2025 challenging the original assessment order stood dismissed in light of the above order.
Table of Cases Referred
| Case Name | Court | Ratio / Verdict |
|---|---|---|
| No external case law was cited in this judgment | – | The ruling was based on facts and application of limitation condonation principles under GST |
Between Fine Lines
For businesses, this judgment underscores that genuine efforts like filing rectification applications before resorting to appeal can justify condonation of delay. However, such relief comes with conditions – here, a total pre-deposit of 15% of disputed demand. Importantly, the order also shows that bank account freeze orders will be lifted once compliance with pre-deposit is demonstrated, offering relief to taxpayers facing financial constraints.
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