Tvl. M V Rajarathinam Impex vs. The Assistant Commissioner (St) 1

Facts

The petitioner, Tvl. M.V.Rajarathinam Impex, filed a writ petition challenging an assessment order dated 15.02.2025 passed by the Assistant Commissioner (ST), Tuticorin, and a subsequent order dated 19.07.2025 by the Deputy Commissioner (CT), GST Appeal, Tirunelveli, which rejected the petitioner's appeal on grounds of limitation. The petitioner had pre-deposited Rs. 19,168/- (10% of the disputed tax) at the time of filing the appeal. Additionally, Rs. 1,00,436/- was recovered directly from the petitioner's bank account. The tax period under challenge is 2020-2021.

Held

The Court held that while the rejection of the appeal on grounds of limitation by the second respondent was legally sound in principle, citing the Supreme Court judgments in Singh Enterprises and Hongo India, the substantial recovery of tax (over 43% of the disputed amount) warranted a different approach. The Court noted that in similar situations where an assessee failed to respond to a show cause notice, matters were remitted back to the original authority on terms, including a deposit of 25% of the disputed tax. Given that more than 25% had already been recovered from the petitioner, the Court was inclined to quash the impugned order. The Court directed the petitioner to file a reply to the notice in DRC 01, dated 20.11.2024, treating the impugned order as an addendum to the Show Cause Notice, within thirty days. The first respondent was directed to pass fresh orders on merits after hearing the petitioner within two months thereafter. Failure to comply would allow respondents to proceed as if the writ petition was dismissed. No specific issue was left undecided.

Key Issues

1. Whether the rejection of the petitioner's appeal by the second respondent on grounds of limitation, despite a substantial pre-deposit and recovery of tax, is legally sustainable? (Mixed question of law and fact, concerning principles of natural justice and procedural fairness under GST law). Petitioner's arguments: The petitioner contended that their appeal was rejected solely on the technical ground of limitation, overlooking the substantial amount of tax already recovered (Rs. 1,00,436/- plus Rs. 19,168/- pre-deposit). They relied on the principle that in similar circumstances, where an assessee failed to respond to a show cause notice, orders were set aside and cases remitted back on terms, subject to a deposit of 25% of the disputed tax. Revenue's arguments: The respondents argued that the appeal was correctly rejected due to being filed beyond the condonable period of limitation. They cited the Supreme Court judgments in Singh Enterprises Vs CCE and CCE and Customs Vs. Hongo India (P) Limited, which uphold the strict application of limitation periods for appeals.