This ruling of High court serves as an important precedent, reinforcing that procedural delays should not automatically result in the dismissal of appeals, particularly when statutory requirements are met.
The Madras High Court has ruled that an appeal cannot be dismissed solely on procedural grounds if the assessee has complied with statutory requirements, including the mandatory pre-deposit. The decision was pronounced by the bench of Justice Vivek Kumar Singh in the case of Tvl. Chennais Pet v. The State Tax Officer (W.P.(MD) No. 3995 of 2025).
Background of the Case
The case revolved around a procedural lapse wherein a crucial notice was uploaded in the “Additional Notices” column of the GST common portal. Due to this, the assessee’s consultant remained unaware of the proceedings initiated by the State Tax Officer. Consequently, the assessee was unable to submit a timely response.
The situation came to light only on November 16, 2024, when the assessee discovered that their bank account had been attached by the State Tax Officer as part of recovery proceedings under Section 79 of the GST Act, 2017. Promptly thereafter, the assessee filed an appeal on November 20, 2024, along with a petition for condonation of a 35-day delay. Additionally, the assessee complied with Section 107(6) of the Act by making a pre-deposit amounting to 10% of the disputed tax liability.
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Department’s Argument and Court’s Findings
The Deputy Commissioner (ST) GST Appeals, the second respondent, rejected the appeal solely on the ground that it exceeded the condonable period of limitation by five days. The department contended that since the appeal was filed 35 days late, the rejection was justified.
However, the High Court observed that the delay, while significant, warranted consideration in the interest of justice. The court took into account that:
- The procedural lapse was unintentional and beyond the control of the assessee.
- The assessee had already discharged a substantial portion of the disputed tax liability through pre-deposit.
- Dismissing the appeal on procedural grounds would lead to undue hardship.
Court’s Verdict
The bench ruled in favor of the assessee, quashing the rejection order and remanding the matter back to the department for fresh consideration. The court emphasized that appeals should not be dismissed merely due to procedural lapses when an assessee has made genuine efforts to comply with statutory obligations.
Key Takeaways from the Judgment
- Pre-deposit compliance strengthens an appeal – If an assessee complies with the mandatory 10% pre-deposit rule, the appeal deserves fair consideration.
- Technical lapses should not defeat justice – If an assessee faces unintended procedural delays due to genuine reasons, their appeal should not be summarily rejected.
- Tribunals must consider surrounding circumstances – The court highlighted that procedural rigidity should not override the principles of natural justice.
Conclusion
This ruling serves as an important precedent, reinforcing that procedural delays should not automatically result in the dismissal of appeals, particularly when statutory requirements are met. The judgment underscores the necessity of balancing compliance with natural justice, ensuring taxpayers are not unfairly penalized for minor procedural lapses.
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