Uthandan Enterprises vs. The Deputy Commissioner (GST)(Appeal) (State Tax)

Held

The Court quashed the impugned order dated 04.06.2025 passed by the second respondent. The case was remitted back to the second respondent for de novo adjudication. This decision was made conditional upon the petitioner depositing 25% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving the order. The Court reasoned that while the petitioner's challenge was to the non-consideration of their reply, the limitation period for appeal had expired. The petitioner's willingness to pre-deposit 25% of the disputed tax facilitated the Court's decision to grant a fresh opportunity. The Court directed that if the petitioner complies with the pre-deposit stipulation, the second respondent shall pass a fresh order on merits within three months. Concurrently, the attachment of the petitioner's bank account shall be automatically lifted, provided the deposit is made and the petitioner is not in arrears for any other tax period. The Court explicitly stated that if the petitioner fails to comply, the second respondent can proceed to recover the tax as if the writ petition was dismissed. No issue was expressly left undecided.

Facts

The petitioner, Uthandan Enterprises, filed a writ petition challenging an order dated 04.06.2025 passed by the second respondent, the State Tax Officer. This order was preceded by a Show Cause Notice dated 31.12.2021, to which the petitioner had submitted a reply. However, the petitioner contended that the second respondent passed the impugned order without considering their reply. The tax period in dispute is May 2019 to March 2020. The petitioner also sought the de-freezing of their bank account and an opportunity for a personal hearing. The writ petition was filed on 07.08.2026, after the limitation period for filing an appeal under Section 107 of the GST enactments had expired.

Key Issues

1. Whether the impugned order passed by the second respondent is liable to be quashed for failure to consider the petitioner's reply to the Show Cause Notice, thereby violating principles of natural justice, as argued by the petitioner? 2. Whether the petitioner is entitled to a de novo adjudication and de-freezing of their bank account, subject to certain conditions, given the circumstances, as sought by the petitioner? The petitioner argued that the second respondent passed the impugned order without considering their detailed reply to the Show Cause Notice, which is a violation of natural justice. They sought to quash the order and direct the de-freezing of their bank account. The revenue (respondents 1 and 2) did not record any specific arguments in the judgment regarding the merits of the petitioner's reply or the procedural lapse, but they were represented and took notice of the petition.