M.Balaji vs. The State Tax Officer Cum Commercial Tax Officer

Held

The Court quashed the impugned order dated 01.06.2026. The case was remitted back to the Respondent for de novo adjudication. This decision was made conditional upon the petitioner depositing 10% of the disputed tax in cash from his Electronic Cash Register within thirty days of receiving a copy of the order. Any payments already made were to be adjusted towards this pre-deposit. The petitioner was also directed to file a reply to the Show Cause Notice dated 22.08.2026, along with requisite documents, treating the impugned order as an addendum to the Show Cause Notice. The Respondent was directed to pass a fresh order on merits expeditiously, preferably within three months of the petitioner's compliance. Upon compliance, the attachment of the petitioner's bank account would be automatically lifted, provided there were no other arrears for different tax periods. The Court clarified that bank attachment would be lifted only upon the deposit and if the petitioner was not in arrears for other periods. If the petitioner failed to comply with these stipulations, the Respondent was at liberty to proceed with recovery as if the Writ Petition had been dismissed.

Facts

The petitioner, M. Balaji of M/s. Balaji Rough Stone Quarry, filed a Writ Petition before the Madurai Bench of the Madras High Court challenging an order dated 01.06.2026 passed by the State Tax Officer cum Commercial Tax Officer, Nilakottai Assessment Circle. This order was preceded by a Show Cause Notice in Form GST DRC-01 dated 22.08.2026. The petitioner contended that he did not file a reply to the Show Cause Notice and was not afforded an opportunity to submit documents to substantiate his case, leading to the impugned order. The petitioner also noted that the limitation period for filing an appeal under Section 107 of the GST enactments had expired. The Writ Petition was filed on 12.08.2026. The petitioner expressed willingness to pre-deposit 10% of the disputed tax demand.

Key Issues

1. Whether the impugned order dated 01.06.2026, passed by the Respondent (State Tax Officer cum Commercial Tax Officer) is liable to be quashed as illegal, arbitrary, without jurisdiction, and against the principles of natural justice, particularly in light of the petitioner not being afforded an opportunity to file a reply and submit documents, and the expiry of the appeal period under Section 107 of the GST enactments? Petitioner's Arguments: The petitioner argued that the impugned order was passed without providing him an adequate opportunity to respond to the Show Cause Notice and submit supporting documents, thus violating principles of natural justice. The petitioner also indicated a willingness to pre-deposit 10% of the disputed tax demand as a condition for de novo adjudication, acknowledging the expiry of the statutory appeal period. Revenue's Arguments: The judgment does not record any specific arguments made by the Respondent (State Tax Officer cum Commercial Tax Officer).