M/S.Vignesh Paper Link vs. The Assistant Commissioner (St)-1

Held

The Court quashed the impugned assessment order dated 27.11.2024 and the consequential appellate orders. The case was remitted back to the respondents for a fresh adjudication. This was subject to the petitioner depositing 40% of the disputed tax within thirty days of receiving the order, in addition to the 10% already pre-deposited. Any tax amount already recovered would be adjusted towards this pre-deposit, and if more than 50% of the disputed tax had already been recovered, no further pre-deposit would be required. The petitioner was also directed to file a reply to the Show Cause Notice dated 07.05.2024 within the same period. The respondents were to pass a final order on merits within three months of receiving the reply and pre-deposit. The Court noted that the respondents would have liberty to proceed with recovery if the petitioner failed to comply with the stipulations, as if the writ petition was dismissed in limine. The respondents were also mandated to provide due notice before passing any order.

Facts

The petitioner, M/s. Vignesh Paper Link, filed a writ petition challenging an ex parte assessment order dated 27.11.2024 passed by the Assistant Commissioner (ST)-1 for the tax period 2018-19, which was issued in the absence of a reply to the Show Cause Notice dated 07.05.2024. The petitioner subsequently filed two appeals before the Appellate Deputy Commissioner (CT), which were dismissed on 29.04.2025 and 29.05.2026, respectively. The petitioner contended that the entire tax liability had been recovered post facto. The petitioner expressed willingness to pre-deposit 40% of the disputed tax for de novo adjudication, subject to verification of amounts already recovered. The respondents' counsel could not confirm the extent of recovery.

Key Issues

1. Whether the impugned assessment order and consequential appellate orders are liable to be quashed as cryptic, non-speaking, illegal, arbitrary, and without jurisdiction, particularly in light of the alleged non-compliance with the principles of natural justice? Petitioner's arguments: The petitioner argued that the assessment order was passed ex parte without considering any reply to the Show Cause Notice. The subsequent appellate orders were also flawed. They sought to quash these orders and sought a fresh adjudication after an opportunity of personal hearing. They also relied on the principle that a de novo adjudication should be permitted under certain conditions. Revenue's arguments: The judgment records no specific arguments from the respondents regarding the merits of the petitioner's claims. However, the respondents' counsel took notice and appeared before the court.