The Madras High Court has dismissed a writ appeal filed against an order directing the assessee to pursue the statutory appellate remedy under the Central Goods and Services Tax Act, 2017, while making it clear that observations made by the Writ Court on the merits of the assessment cannot prejudice or influence the appellate authority’s independent consideration of the dispute. 

The bench of Justice Anita Sumanth and Justice Sunder Mohan has observed that the observations made by the Writ Court on the merits of the assessment “shall not stand in the way of an independent adjudication of the appeal, in accordance with law.” This clarification ensures that the appellate authority is required to examine the assessment independently and cannot treat the earlier observations of the Writ Court as binding findings on the merits of the tax dispute.

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The appeal was filed against the Joint Commissioner of CGST and Central Excise, Chennai South Commissionerate. The assessee challenged the earlier order dated June 8, 2026, passed by the Writ Court. The earlier order had dismissed the writ petition but granted the assessee liberty to challenge the impugned assessment order dated February 4, 2025, by way of an appeal under the CGST Act, 2017.

The principal issue before the Division Bench was therefore not whether the assessment itself was legally sustainable, but whether the assessee’s statutory appeal could be considered independently without being affected by observations on the merits contained in the earlier Writ Court order.

During the hearing, counsel appearing for the appellant did not seriously dispute the direction requiring the assessee to avail the appellate remedy. However, the appellant raised a significant procedural concern. It was submitted that, for the statutory appeal to be meaningful and effective, the observations made by the Writ Court concerning the merits of the assessment should either be set aside or, alternatively, the appellate authority should be expressly directed not to allow those observations to influence its decision.

The Department did not seriously oppose this submission. The Division Bench consequently adopted a balanced approach by retaining the earlier direction requiring the assessee to pursue the statutory appeal while safeguarding the assessee’s right to an independent adjudication on merits.

The Court accordingly confirmed the earlier order to the extent that it relegated the assessee to the statutory appellate remedy. At the same time, it protected the appellate process by expressly directing that the merits-related observations of the Writ Court should not impede the independent consideration of the appeal.

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