In a significant ruling highlighting the perils of ill-advised tax compliance, the Madras High Court has set aside an order issued by the GST department against a small business owner, while sharply criticizing the role of unqualified tax consultants.
The bench of Justice Krishnan Ramasamy criticized the trend of assessees relying on unqualified consultants who often provide erroneous advice due to workload or lack of expertise. “This Court comes across similar instances in several cases. Such ill advice causes serious prejudice to taxpayers,” he remarked. The bench urged the tax department to issue a circular advising taxpayers to engage only qualified consultants to avoid such pitfalls.
The writ petition was filed by the proprietor of an Erode-based firm whose bank account had been frozen following an adverse order passed by the Assistant Commissioner of State Taxes on August 21, 2024. The action stemmed from a reply filed to a GST show-cause notice that was found to be “irrelevant,” owing to the negligence of the consultant representing the petitioner.
The petitionerl argued that the freezing of the firm’s bank account had paralyzed its operations, jeopardizing not only its revenue but also the livelihoods of half a dozen employees. The petitioner expressed willingness to deposit 25% of the disputed tax amount as a condition for reconsideration of the case.
Taking note of the situation, the Court set aside the impugned order and remanded the matter to the tax department for fresh consideration. Justice Ramasamy directed the petitioner to pay 25% of the disputed tax within four weeks and file a proper reply within three weeks thereafter. The department was instructed to grant a personal hearing and pass fresh orders on merits.
The Court ordered the de-freezing of the petitioner’s bank account, noting that the attachment could not continue after the impugned order was set aside.
Case Details
Case Title: Chandrasekaran Versus Assistant Commissioner (ST)
Case No.: W.P.No.30638 of 2025 and W.M.P.Nos.34336, 34338 & 34339 of 2025
Date: 19.08.2025
Counsel For Petitioner: R.Ananthi
Counsel For Respondent: P.Selvi
Read More: Delhi Notifies BNSS Rules: Court Summons and Warrants to Be Served via WhatsApp and Email
