The Madras High Court has set aside a Goods and Services Tax (GST) assessment order issued against a Chennai-based business proprietor for the financial year 2020–21, directing the authorities to conduct a fresh assessment de novo on the condition that the petitioner deposits 50% of the disputed tax within 30 days.

The bench of Justice C. Saravanan passed the order while disposing of a writ petition filed against the assessment order dated July 18, 2024, issued by the Deputy State Tax Officer, Choolai Assessment Circle, Chennai. The assessment had been preceded by a show-cause notice (GST DRC-01) dated October 16, 2023.

The petitioner, Mahesh Kumar J Dolia approached the High Court challenging the assessment order, which confirmed a tax demand after he allegedly failed to respond to the show-cause notice. It was submitted that the order was passed ex parte, without granting the petitioner an opportunity to substantiate his case. The petitioner requested that the assessment be reopened and that he be allowed to file a reply along with supporting documents.

The court noted that although the petitioner had not participated in the assessment proceedings or filed a reply to the show-cause notice, the High Court had, in similar situations, granted relief by quashing ex parte assessments—subject to deposit of a portion of the disputed tax.

The Court observed there was no reason to deviate from this consistent approach and accordingly quashed the impugned assessment order dated July 18, 2024.

The Court remitted the matter to the tax department for fresh adjudication, subject to the various conditions.

Firstly, the petitioner must deposit 50% of the disputed tax amount in cash through his electronic cash ledger within 30 days.

Secondly, any amount already paid shall be adjusted against the pre-deposit requirement.

Thirdly, the petitioner shall submit a detailed reply to the show-cause notice dated October 16, 2023, along with supporting documents within 30 days.

Fourthly, upon compliance, the tax authority shall pass a fresh order de novo on merits within three months.

Fifthly, the attachment of the petitioner’s bank account (if any) shall stand lifted, subject to fulfillment of the above conditions.

Lastly, failure to comply will entitle the department to recover tax dues as per the original assessment order.

The Court also directed that the petitioner be given a reasonable opportunity of hearing before a new order is passed and emphasized the need for cooperation in the re-assessment process.

Case Details

Case Title: Mahesh Kumar J Dolia Versus The Deputy State Tax Officer

Case No.: WP No. 39104 of 2025

Date:  16-10-2025

Counsel For Petitioner: Karventhan A P

Counsel For Respondent: K. Vasanthamala

Read More: Madras HC Quashes Ex Parte GST Assessment; Orders Fresh Hearing with 50% Deposit