The Madras High Court has set aside a GST demand order that recorded that no reply had been submitted, although the taxpayer’s reply and supporting documents were on record.
The bench of Justice Senthilkumar Ramamoorthy directed reconsideration of the matter, subject to payment of 10% of the disputed tax demand, and ordered that any bank account attachment arising from the impugned order be lifted upon fulfilment of that condition.
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The dispute concerned an assessment order dated June 11, 2025, covering the tax period from April 2021 to March 2022. The taxpayer challenged the order primarily on the ground that its response to the show cause notice and the documents enclosed with it had not been considered.
The taxpayer submitted that the confirmed demand arose from an alleged mismatch between the taxpayer’s GSTR-3B returns and deductions made in respect of supplies under GSTR-7.
According to the taxpayer, its response to the show cause notice included copies of the relevant GSTR-3B returns and details of TDS and TCS credits received during the relevant period. Counsel argued that these documents had been overlooked while confirming the demand.
The taxpayer had approached the High Court after the statutory period for filing an appeal had expired. In view of this delay, its counsel agreed, without prejudice, to remit 10% of the tax demand as a condition for remanding the matter. An endorsement recording this undertaking was made on the case bundle.
On examining the record, the Court found that the taxpayer’s reply was available and indicated that supporting documents had been uploaded with it. These included GSTR-3B returns and details of TDS and TCS credits received.
Despite this, the impugned assessment order stated that no reply had been submitted. The Court therefore concluded that reconsideration was necessary.
The relief addressed the failure to consider the taxpayer’s response and documents. The Court left the underlying mismatch and resulting tax liability for fresh examination by the assessing authority.
Taking into account the belated approach to the Court and the taxpayer’s undertaking, the High Court made the remand conditional on payment of 10% of the tax demand within 30 days from receipt of a copy of its order.
Subject to that payment, the assessment order was set aside and the matter remanded for reconsideration. The assessing authority was directed to provide the taxpayer with a reasonable opportunity and issue a fresh order within five months from the date of remittance.
The Court further directed that any attachment of the taxpayer’s bank account relating to the impugned order would stand lifted upon fulfilment of the deposit condition.
The writ petition was disposed of on these terms, the connected miscellaneous petitions were closed, and no costs were awarded.
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