Madras High Court Allows Late GST Appeal :Grants Relief to Taxpayer

1. Introduction

In a significant judgment, the Madras High Court has provided relief to a taxpayer whose bank account was frozen by GST authorities. Even though the taxpayer missed the deadline to file a GST appeal, the court allowed the appeal to be filed after the limitation period, and also allowed the taxpayer to withdraw funds from the frozen bank account to fulfill the legal requirement of pre-deposit for filing the appeal.

2. Background of the Case

The taxpayer (petitioner) received a demand order under GST in August 2024, relating to a tax dispute.

The taxpayer did not file an appeal within the prescribed time limit under the GST Act.

In April 2025, the GST Department froze the taxpayer’s bank account to recover the disputed tax amount.

The taxpayer then approached the Madras High Court through a Writ Petition, seeking:

Permission to file a delayed appeal, and

Access to funds in the frozen account to pay the 25% pre-deposit required to file the appeal.

3. Court’s Observations

The original GST order was passed without proper hearing (ex parte), violating principles of natural justice.

Though the appeal was filed beyond the permitted time, the court took a liberal view due to the unfair nature of the assessment.

The court emphasized the importance of providing a fair opportunity to the taxpayer to contest the demand.

4. Key Orders by the High Court

1. Permission to File Delayed Appeal

The High Court allowed the taxpayer to file the appeal even though the deadline was missed, considering the unfair assessment process.

2. Withdrawal of 25% from Frozen Account

The court directed the GST department to allow the petitioner to withdraw 25% of the disputed amount from the frozen account to make the required pre-deposit.

3.Proof of Payment Required

The taxpayer must submit proof of 25% payment to the authorities after filing the appeal.

4.Immediate Defreezing of Bank Account

Upon receiving proof of payment, the GST Department must unfreeze the bank account without delay.

5. Closure of Miscellaneous Petitions

All related petitions were disposed of, and the court ordered no legal costs to be paid by either side.

5. Impact of the Judgment

Strengthens taxpayer rights by allowing delayed appeal under exceptional circumstances.

Ensures that taxpayers are not denied justice due to technical delays when natural justice is violated.

Gives clear instructions on using frozen bank funds to fulfill legal requirements.

Highlights the importance of fair assessment procedures under GST law.