Case Title: M/s. Sri Ganapathy Textiles vs Deputy State Tax Officer-2
Court: Madurai Bench of Madras High Court
Petition No.: W.P.(MD) No.15014 of 2025
Judgment Date: 03.06.2025
Category: Assessment order set aside – Violation of natural justice
Relevant Sections: Sections 54 and 107 of the CGST/TNGST Act, 2017
Dispute Type: Ex parte assessment order without proper notice
Facts (Para 3–5):
The petitioner, M/s. Sri Ganapathy Textiles, a sole proprietorship, was a registered dealer under GST whose registration was cancelled on 30.06.2021. After cancellation, a show cause notice dated 03.07.2023 was issued for the tax period July 2017 to March 2018. Since the business had already ceased operations, the notice went unnoticed. Subsequently, an order-in-original dated 11.10.2023 was passed, which the petitioner later challenged as being ex parte and violative of natural justice.
Questions of Law (Para 2 & 5):
Whether an assessment order passed after cancellation of GST registration without effective notice to the taxpayer is sustainable under law, and whether such an order should be remanded for fresh adjudication.
Court’s Observations (Para 6–8):
The State contended that the writ petition was barred in view of the Glaxo SmithKline Consumer Healthcare Ltd. (2020) decision, emphasizing the availability of alternate remedies. However, the Court observed that the order had been passed without proper service of notice after the petitioner had ceased business operations. Recognizing violation of natural justice, the Court permitted intervention but balanced the relief by directing the petitioner to deposit 25% of the disputed tax within 30 days as a precondition for remand. The Court also clarified that the impugned order would be treated as a corrigendum to the earlier show cause notice, giving the petitioner 30 days to respond.
Judgment (Para 7–10):
The Hon’ble Court quashed the impugned assessment order dated 11.10.2023, subject to the petitioner depositing 25% of the disputed tax in cash within 30 days. The matter was remanded for re-adjudication, directing the authority to pass a fresh order on merits within two weeks after receipt of reply. It was further directed that if the demand is dropped, the deposited amount shall be refunded to the petitioner. No costs were imposed.
Summary of Cases Referred:
| Case Name | Citation/Details | Held |
|---|---|---|
| Assistant Commissioner (CT), LTU, Kakinada & Ors. v. M/s. Glaxo SmithKline Consumer Healthcare Ltd. | Civil Appeal No. 2413 of 2020 (Supreme Court) | Held that where statutory remedies exist, writ petitions are generally not maintainable. However, exceptions apply in cases of violation of natural justice or lack of jurisdiction. |
Between Fine Lines:
This decision reiterates that ex parte GST assessment orders passed after cancellation of registration—without valid service of notice—violate principles of natural justice. However, courts may impose conditional relief (like partial deposit) to ensure revenue balance. For taxpayers, it emphasizes the importance of maintaining updated contact and registration status even post-cancellation to avoid unnoticed proceedings.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
