Ariyalur Municipality, Vs The State Tax Officer — GST and Indirect Tax | Madras HC (2026)

Ariyalur Municipality, Vs The State Tax Officer — GST and Indirect Tax | Madras HC (2026)

What the court decided

AI extract

Outcome

Assessment Order dated 04.02.2025 quashed; case remitted to the 1st Respondent for fresh adjudication subject to pre-deposit of 25% of the disputed tax (cash or Electronic Credit Ledger) within 30 days and filing of a reply to the SCN in GST DRC-01 dated 12.12.2024 (assessment order treated as its addendum), with set-off of prior recoveries/payments; final order on merits preferably within 3 months on compliance; bank-account attachment automatically vacated/lifted on compliance; on default, recovery as if the petition was dismissed in limine. Writ Petition disposed of with the above observations; connected WMP closed; no costs.

Issue for consideration

Whether the impugned Order rejecting the Petitioner's appeal dated 07.07.2025 (against the Assessment Order dated 04.02.2025) on the ground of limitation should be quashed and the Petitioner directed that the appeal be numbered and disposed of within a time frame fixed by the Court. +1 more

Court's answer

The Writ Petition was disposed of at the stage of admission itself with the consent of learned counsel on both sides; rather than reviving the appeal barred by limitation and non-pre-deposit, the Court adopted the route of remitting the matter for fresh adjudication.

Ratio / Principle

Following the consistent view taken by this Court under similar circumstances, and taking note that the Assessment Order dated 04.02.2025 was exparte in nature (the Petitioner having failed to reply to the Show Cause Notice in Form GST DRC-01 dated 12.12.2024), the Assessment Order is quashed and the case is remitted to the 1st Respondent to redo the exercise.

Key takeaways

The remand is subject to the Petitioner depositing 25% of the disputed tax in cash or from the Petitioner's Electronic Credit Ledger within thirty (30) days of receipt of the order; any recovery made or amount already paid towards the tax liability shall be set off against this pre-deposit.ratio¶9
Within the same period the Petitioner shall file a reply to the Show Cause Notice in GST DRC-01 dated 12.12.2024 with requisite documents to substantiate the defence, treating the Assessment Order dated 04.02.2025 as an addendum to the Show Cause Notice dated 12.12.2024.ratio¶10

Detailed headnote1 paragraphs

Madras High Court (C. Saravanan, J.), 29-01-2026 - WP No. 2929 of 2026 (connected WMP No. 3277 of 2026): Ariyalur Municipality v. (1) The State Tax Officer/The Joint Commissioner (ST)(Intelligence), Trichy and (2) The Appellate Authority/Deputy Commissioner (CT). Writ under Art.226 seeking certiorarified mandamus to quash the Order-in-Appeal dated 16.10.2025 (ref. ZD331025173453O) rejecting, on limitation grounds, the Municipality's appeal dated 07.07.2025 against the Assessment Order dated 04.02.2025 (raised on a Show Cause Notice in Form GST DRC-01 dated 12.12.2024 for tax period 2017 - 2018, left unanswered), and to direct that the appeal be numbered and disposed of within a Court-fixed time frame. Disposed of at the admission stage with the consent of counsel. Holding the assessment exparte and following the Court's consistent view, the Court quashed the Assessment Order and remitted the case to the 1st Respondent to redo adjudication, subject to: deposit of 25% of the disputed tax (cash or Electronic Credit Ledger) within 30 days; filing of a reply to the DRC-01 notice with supporting documents, the Assessment Order being treated as an addendum thereto; set-off of prior payments/recoveries against the pre-deposit; a fresh final order on merits preferably within three months with due notice; automatic vacatur/lifting of the bank-account attachment on compliance, conditioned on absence of arrears for other tax periods (barring amounts under the Assessment Order dated 04.02.2025); and liberty to recover the tax in accordance with law as if the petition were dismissed in limine on default. No costs.

WP No. 2929 of 2026

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 29-01-2026

CORAM

THE HON'BLE MR JUSTICE C. SARAVANAN

WP No. 2929 of 2026

AND

WMP NO. 3277 OF 2026

Ariyalur Municipality, Rep by its commissioner, R Ashok Kumar, No.1 Municipality building, Main Road Ariyalur-621704

..Petitioner(s)

Vs

1.The State Tax Officer The Joint Commissioner (ST)(Intelligence) No.C/107, B3-II nd floor, North East Extension Sastri Road, Thillai Nagar, Trichy-620 018.

2.The Appellate authority Deputy commissioner (CT) No.12A/26, 2^nd main Road, Ponanagar, Trichirappalli-1

..Respondent(s)

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WP No. 2929 of 2026

PRAYER

Writ Petition filed under Art.226 of Constitution of India seeking for issuance of Writ of Certiorarified Mandamus, calling for the records pertaining to the Impugned Order of rejecting of the appeal filed by the Petitioner, passed by the 2^nd respondent vide reference No.ZD331025173453O dated 16.10.2025, quash the same and consequentially direct the 2^nd Respondent to number the said appeal and dispose of the same within the time frame fixed by this Court.

For Petitioner(s): Mr. Nirmal Aditya For Respondent(s): Mr. V.Prashanth Kiran Government Advocate

ORDER

Mr.V.Prashanth Kiran, learned Government Advocate takes notice for the Respondents.

This Writ Petition is being disposed of at the stage of admission itself

with the consent of the learned counsel for the Petitioner and the learned Government Advocate for the Respondents.

The Petitioner is before this Court against the impugned Order-inAppeal dated 16.10.2025 passed by the 2^nd Respondent, whereby the Petitioner’s appeal dated 07.07.2025 preferred against the Assessment Order dated 04.02.2025 has been rejected on the ground of limitation.

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WP No. 2929 of 2026

4.It is noticed that the petitioner had preferred an appeal on 07.07.2025

against the Assessment Order dated 04.02.2025 beyond the statutory period of limitation and without mandatory pre-deposit to file an appeal under respective GST Enactments.

It is further noticed that the Assessment Order dated 04.02.2025 passed passed by the 1^st Respondent was preceded by a Show Cause Notice in GST DRC–01 dated 12.12.2024 for the tax period 2017 – 2018 to which the Petitioner had failed to file a reply and has thus suffered the Assessment Order in the hands of the 1^st Respondent on 04.02.2025.

6.The learned counsel for petitioner submitted that the petitioner is to be given due opportunity to redress his grievance before the Appellate Authority/Deputy Commissioner and undertake to pre-deposit 10% of disputed tax liability as a condition for denovo adjudication.

The learned Government Advocate for respondents submitted that the prayer sought by the petitioner cannot be countenanced.

I have considered the submissions advanced by the learned counsel for the Petitioner and the learned Government Advocate for the Respondents.

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WP No. 2929 of 2026

Following the consistent view taken by this Court under similar circumstances and taking note of the fact the order dated 04.02.2025 is an exparte in nature as the petitioner failed to file a reply to the Show Cause Notice in Form GST DRC-01 dated 12.12.2024, the Assessment Order is quashed and the case is remitted back to the 1^st Respondent to re-do the exercise subject to the Petitioner depositing 25% of the disputed tax in cash or from the Petitioner's Electronic Credit Ledger within a period of thirty (30) days from the date of receipt of a copy of this order.

Within such time, the Petitioner shall also file a reply to the Show Cause Notice in GST DRC-01 dated 12.12.2024 together with requisite documents to substantiate the defence by treating the Assessment Order dated 04.02.2025 as an addendum to the Show Cause Notice dated 12.12.2024.

In case there has been any recovery or any amount paid by the Petitioner towards the tax liability, the same shall be set off for the purpose of pre-deposit of 25% as ordered above.

In case the Petitioner complies with the above stipulations, the 1^st Respondent shall proceed to pass a final order on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months

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WP No. 2929 of 2026

of such reply/pre-deposit. Subject to the Petitioner complying with the above stipulations, the attachment of the bank account of the Petitioner shall also stand automatically vacated.

It is made clear that bank attachment shall be lifted subject to the deposit of 25% of the disputed tax as ordered above and the petitioner not being in arrears of any other amount demanded for any other tax period barring the amount demanded under the Assessment Order dated 04.02.2025.

In case the Petitioner fails to comply with any of the stipulations, the 1^st Respondent is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine today.

It is needless to state, before passing any such order, the 1^st Respondent shall give due notice to the Petitioner.

This Writ Petition stands disposed of with the above observations. No costs. Connected Writ Miscellaneous Petition is closed.

29-01-2026

Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No RPP

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WP No. 2929 of 2026

To

1.The State Tax Officer The Joint Commissioner (ST)(Intelligence) No.C/107, B3-II nd floor, North East Extension Sastri Road, Thillai Nagar, Trichy-620 018 2.The Appellate authority Deputy commissioner (CT) No.12A/26,2nd main Road,Ponanagar, Trichirappalli-1

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WP No. 2929 of 2026

C.SARAVANAN J.

RPP

WP No. 2929 of 2026 AND WMP NO. 3277 OF 2026

29-01-2026

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