Unawareness of Proceedings as GST Compliance entrusted to a Local Auditor: Madras HC sets aside Demand Order on 10% Pre-deposit Condition

In a recent judgment, the Madras High Court invalidated a demand order against Tvl. Samikannu Mariappan, who filed a writ petition under Article 226 of the Indian Constitution. Mariappan argued that he was unaware of Goods and Services Tax (GST) proceedings as he had delegated compliance to a local auditor. His counsel, P. Jayalakshmi, highlighted his age and the turnover being below the GST compliance threshold. The court found that Mariappan had not been heard before the order and agreed to reconsider the case under the condition that he remit 10% of the disputed tax demand within two weeks. It directed the tax department to offer a fresh opportunity for a personal hearing and issue a new order within three months of receiving Mariappan’s response to the show cause notice.