M.Balaji, M/S.Balaji Rough Stone Quarry 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 passing a fresh order. This was conditioned upon the petitioner depositing 10% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving a copy of the order. Any prior payments made would be adjusted towards this pre-deposit. The petitioner was also directed to file a reply to the Show Cause Notice dated 21.08.2025, along with supporting documents, treating the impugned order as an addendum to the show cause notice. If these conditions were met, the respondent was to pass a final order on merits expeditiously, preferably within three months of receiving the reply and pre-deposit. The attachment of the petitioner's bank account would be automatically lifted upon compliance. The Court clarified that the bank attachment would be lifted only if the 10% deposit was made and the petitioner was not in arrears for any other tax period. If the petitioner failed to comply, the respondent could proceed to recover the tax as if the Writ Petition had been dismissed. The respondent was also directed to provide due notice to the petitioner before passing any further order. The issue of whether the original order was entirely without jurisdiction was not expressly decided, but the relief granted implies a procedural flaw.

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 and Form GST DRC-07 issued by the State Tax Officer cum Commercial Tax Officer, Nilakottai Assessment Circle. The impugned order was passed following a Show Cause Notice dated 21.08.2025, to which the petitioner claims not to have filed a reply and was not provided an opportunity to submit documents. The petitioner filed the Writ Petition on 12.08.2026, after the limitation period for filing an appeal under Section 107 of the GST enactments had expired. The amount in dispute is not explicitly stated, but it is referred to as 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 illegal, arbitrary, without jurisdiction, and against the principles of natural justice, particularly in light of the petitioner not being provided an opportunity to file a reply and submit documents? (Question of law and fact, turning on principles of natural justice and procedural fairness under GST law). Contentions: Petitioner: Argued that the impugned order was passed without affording them a proper opportunity to present their case, violating principles of natural justice. They also acknowledged the expiry of the appeal period and expressed willingness to pre-deposit 10% of the disputed tax demand for de novo adjudication. Respondent: The judgment records no specific arguments from the respondent. However, the respondent's counsel took notice of the petition.