The Madras High Court has granted conditional relief to a taxpayer after finding that the assessing authority passed a GST order mechanically, without properly considering a detailed reply to the show-cause notice and without providing an opportunity of personal hearing.

The bench of Justice Krishnan Ramasamy directed fresh consideration of the matter, subject to payment of 10% of the disputed tax within four weeks from receipt of a copy of the court’s order and expressly clarified that the setting aside of the assessment would take effect only from the date of payment.

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The petitioner/assessee has challenged a summary order in Form GST DRC-07, along with the accompanying detailed assessment order dated December 22, 2025, concerning financial year 2021–22.

The assessment had been passed by the Deputy Commercial Tax Officer attached to the Office of the Assistant Commissioner (ST), Korattur Assessment Circle, Chennai.

The taxpayer approached the High Court under Article 226 of the Constitution, contending that the assessment was arbitrary and contrary to the principles of natural justice.

With the consent of counsel appearing for both sides, the court took up the petition for final hearing at the admission stage.

Counsel for the taxpayer submitted that all notices and communications had been uploaded under the “Additional Notices” column on the GST common portal.

Although the taxpayer had filed a reply to the show-cause notice, it argued that the assessing authority had not considered the response with proper application of mind. The taxpayer also complained that the assessment had been completed without granting any opportunity of personal hearing.

Seeking an opportunity to present its case afresh, the taxpayer undertook to pay 10% of the disputed tax. An endorsement recording of that undertaking was also made in the case bundle.

The Additional Government Pleader appearing for the tax department submitted that the notices had been uploaded on the GST online portal.

However, the department’s counsel fairly admitted that no opportunity of personal hearing had been provided before the impugned assessment order was passed.

The department accordingly requested that the matter be remanded for reconsideration, subject to the taxpayer paying 10% of the disputed tax.

After considering the submissions and examining the material on record, the High Court noted that the show-cause notice had been uploaded on the GST portal and that the taxpayer had filed a detailed reply.

Despite that response, the assessing authority had passed the order mechanically and without proper application of mind, the court found.

The court further held that passing the assessment without providing an opportunity of personal hearing amounted to a gross violation of the principles of natural justice.

The ruling therefore addressed two procedural deficiencies: the failure to properly consider the taxpayer’s written explanation and the denial of an opportunity to present its case at a personal hearing.

Taking into account the taxpayer’s undertaking, the High Court directed that the assessment order dated December 22, 2025, be set aside and the matter remanded for fresh consideration, subject to payment of 10% of the disputed tax.

The payment must be made within four weeks from the date of receipt of a copy of the High Court’s order.

Crucially, the court stipulated that the setting aside of the assessment would take effect from the date of payment. The relief was therefore expressly conditional upon compliance with the payment direction.

The High Court permitted the taxpayer to submit its reply or objections, together with any required supporting documents, within three weeks from the date of payment.

Upon receipt of that response, the assessing authority must consider it and issue a clear 14-day notice fixing the date of personal hearing.

After hearing the taxpayer, the authority must pass an appropriate order on the merits and in accordance with law, as expeditiously as possible.

The High Court’s order provides the taxpayer with another opportunity to contest the assessment through written submissions, supporting documents and a personal hearing.

It does not determine the correctness of the underlying tax demand. The substantive dispute remains open for adjudication in the remanded proceedings. The judgment does not specify the disputed tax amount or discuss the substantive grounds on which the assessment was raised.

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