Chhattisgarh High Court Allows GST Appeal Beyond Limitation Subject To 50% Tax Deposit

The Chhattisgarh High Court has permitted a taxpayer to file a statutory appeal against an ex parte GST assessment order despite the expiry of the limitation period, subject to depositing 50% of the assessed tax liability of ₹8.17 lakh.

Justice Narendra Kumar Vyas exercised the court's powers under Article 226 of the Constitution to allow Korba Steel Castings to pursue the statutory remedy.

The court observed, "thus, a case for interference by this Court to exercise its power conferred under Article 226 of the Constitution of India to do complete justice between the parties is made out."

The case arose from an ex parte assessment order passed by the State Tax Officer, Korba Circle-II, on December 13, 2023. The order raised a demand of ₹8,17,771.69, including interest and penalty.

The petitioner argued that the assessment was completed without issuing a show cause notice or providing an opportunity of hearing. It claimed that it learnt about the order only after the tax authorities issued a notice to its supplier, seeking recovery of ₹8,17,772 from the amount payable to the petitioner.

Opposing the plea, the State contended that the tax authorities had provided sufficient opportunities to the petitioner, but it had failed to respond. It also argued that the statutory limitation period for filing an appeal had expired.

During the hearing, the petitioner offered to deposit 50% of the assessed tax liability. It sought an opportunity to move an application for setting aside the ex parte assessment order and thereafter pursue the remedies available under law.

Accepting the proposal, the High Court permitted the petitioner to file a statutory appeal against the assessment order within one month from the date of receiving a copy of its order.

The court directed the appellate authority to decide the appeal on its merits without insisting on the delay, which it had already condoned subject to the petitioner depositing ₹4,08,885.84, representing 50% of the assessed liability.

It clarified that depositing this amount before the authorities was a condition precedent for hearing the appeal.

The petitioner was also permitted to raise all defences available under law, including its objection to the passing of the ex parte assessment order, before the appellate authority.

The writ petition was accordingly disposed of.

For Petitioner: Advocate Vikram Sharma

For State: Deputy Government Advocate Anuradha Jain