TaxTMI 
TaxTMI 
TaxTMI 
The Madras High Court had an occasion on 19/08/2025 to handle one issue connected with a tax consultant in GST matter who gave irrelevant reply to the GST Authorities in w p no 30638 of 2025. The complete events are narrated in a story form chronologically as per the high court order.
Mr. Chandrasekaran runs a business registered under GST with the jurisdictional Assistant Commissioner (State Taxes) Karur. On 22/05/2024 he was issued with a show cause notice. He took the help of a tax consultant who happened to be a unprofessional person and the consultant filed an irrelevant reply to the SCN. As the reply was not convincing, the Assistant Commissioner passed order on 21/08/2024 confirming the SCN.
The demand raised in the order was huge and also the bank account was frozen putting the appellant to hardship. He could not make payment to workers and approached the High Court by way of writ for necessary remedies. The high court has observed the happenings and passed a favourable order by setting aside the order dated 21/08/2024 after thoroughly examining the entire background of the case and paras 7 and 8 of the high court order are very crucial leaving message to taxpayers to engage a good tax consultant.
Both the paras as reproduced to create awareness among all concerned to always gpo to a good tax consultant.
7. In the case on hand, a show cause notice was issued to the petitioner on 22.05.2024, for which an irrelevant reply was filed. Hence, impugned order was passed by the first respondent on 21.08.2024. Due to the ill advise of the consultant, the petitioner has filed an irrelevant reply. It is pertinent to mention here that this Court comes across similar instances in several cases, extending ill advice to the clients by the consultants, who are all not qualified persons. Such kind of ill-advice leads to the fact that the clients are not in a position to appear before the Officers concerned with suitable reply supported by documents, which is purely on the negligence on the part of the consultant.
The court also observed the need for some instructions/guidelines to be made public to avoid the occurrences of similar cases in future which are in para 8.
8. This Court feels that this type of wrong advice given by an unqualified person cannot be accepted. The respondent department is directed to issue note/circular to the assessees to engage consultants and get advice from qualified consultants. Otherwise, the assessees file petitions directly through employees or relatives. The ill advice given by the unqualified consultant would generally be on account of the work burden in which they are used to advise very many clients. As and when the assessee approaches these type of consultants, in order to ensure that the assessee does not go out of their hands, the unqualified consultants violate Acts. These are all aspects that would come across before the notice of this Court, while handling various cases. Therefore, the department is directed to come with proper circular to the assessee in respect of engagement of a qualified consultant.
After making the above strong observations, the court set aside the order passed by the respondent and as the taxpayer agreed for a pre deposit of 25%, the respondent was directed to defreeze the bank account immediately. The case was remanded with instructions to pass fresh order after granting hearing.
The message is very clear that the taxpayer should always choose a good tax consultant by seeing the reputation, success rate, knowledge on the subject etc to avoid this cumbersome process of filing writ.
The good news is that GSTAT is in place shortly which shall be of a great relief to all taxpayers who are aggrieved by an order passed under section 107.