Adhavan Coir Products vs. The Assistant Commissioner (St)

Held

The Court quashed the impugned ex parte assessment order dated 30.12.2025 and the consequential recovery proceedings dated 04.06.2026. The case was remitted back to the respondent for a fresh adjudication. This decision was based on the petitioner's willingness to pre-deposit 10% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving the order. The Court directed the petitioner to file a reply to the Show Cause Notice (DRC-01 dated 25.09.2025) along with supporting documents, treating the impugned assessment order as an addendum to the show cause notice. The respondent is to pass a fresh order on merits expeditiously, preferably within three months of the petitioner's compliance. The respondent must provide due notice to the petitioner before passing any fresh order. Failure by the petitioner to comply with the stipulations would allow the respondent to proceed with recovery as if the writ petition was dismissed. The issue of whether the petitioner's turnover relating to trading of exempt coconut fibre is exempt from GST was not expressly decided but will be adjudicated upon during the de novo proceedings.

Facts

The petitioner, Adhavan Coir Products, filed a writ petition challenging an ex parte assessment order dated 30.12.2025, a consequential demand order in Form GST DRC-07 under Section 73, and recovery proceedings initiated via DRC-13 dated 04.06.2026. These orders were passed by the respondent, the Assistant Commissioner (ST), Palani -2 Assessment Circle, pursuant to a GST DRC-01 dated 25.09.2025. The petitioner had not appeared for a personal hearing offered by the respondent. The writ petition was filed on 20.08.2026, after the limitation period for filing an appeal under Section 107 had expired. The disputed tax amount is not explicitly stated. The petitioner agreed to pre-deposit 10% of the disputed tax.

Key Issues

1. Whether the ex parte assessment order and consequential demand and recovery proceedings are illegal, arbitrary, contrary to the CGST Act, 2017 and TNGST Act, 2017, and violative of the principles of natural justice, warranting quashing? Petitioner's arguments: The petitioner contended that the impugned orders were passed ex parte, violating principles of natural justice. They sought to have the assessment order quashed and to be permitted to treat their turnover from trading exempt coconut fibre as exempt from GST. The petitioner also agreed to pre-deposit 10% of the disputed tax as a condition for de novo adjudication. Respondent's arguments: The respondent, represented by the Government Advocate (Taxes), did not record any specific arguments against the petitioner's plea for a fresh adjudication, but rather accepted the Court's direction for de novo proceedings upon compliance by the petitioner.