Tvl.Royal Paints vs. The Assistant Commissioner (St)

Facts

The petitioner, Tvl. Royal Paints, represented by its partner M. Nallathambi, filed a writ petition before the Madurai Bench of the Madras High Court challenging an order dated 24.12.2025 passed by the Assistant Commissioner (ST), Kamarajar Salai Assessment Circle, Madurai. This order confirmed the proposal in a Show Cause Notice (GST DRC-01) dated 29.09.2025 for the tax period 2021-2022, despite the petitioner having filed replies on 09.05.2025 and 05.06.2025. The petitioner argued that they have a fair case on merits and sought an opportunity to file an appeal before the Appellate Commissioner, offering to deposit 25% of the disputed tax.

Held

The Court held that to balance the interests of the petitioner and the revenue, and considering the petitioner's endorsement to deposit 25% of the disputed tax, liberty should be granted to the petitioner to file an appeal before the Appellate Authority. The impugned order dated 24.12.2025 would be set aside in lieu of a fresh order by the Appellate Authority. The ratio decidendi is that in exceptional circumstances, and with a willingness to deposit a portion of the disputed tax, a High Court may grant liberty to file an appeal out of time to ensure principles of natural justice are upheld, even when statutory remedies have not been availed within the prescribed period. The operative direction is that the petitioner must deposit 25% of the disputed tax within thirty days of receiving the order. If complied with, the Appellate Authority shall entertain the appeal on merits without reference to limitation and vacate any bank account attachment. Failure to comply will result in the writ petition being treated as dismissed.

Key Issues

1. Whether the Petitioner is entitled to an opportunity to file an appeal before the Appellate Authority, despite the delay and the pendency of the impugned order, considering their willingness to deposit 25% of the disputed tax? (Question of law and fact, turning on principles of natural justice and the discretion of the Court under Article 226). Petitioner's Contention: The petitioner argued that they have a fair case on merits and deserve a fresh chance to file an appeal. They are willing to deposit 25% of the disputed tax. Respondent's (Revenue's) Contention: The respondent argued that the petitioner ought to have filed an appeal within the prescribed limitation period under Section 107 of the respective GST Enactments. They contended that the writ petition is liable to be dismissed as the petitioner has slept over their rights, citing Supreme Court decisions in Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others, Commissioner of Customs and Central Excise Vs. Hongo India Private Limited and another, and Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Consumer Health Care Limited.