Mvs Veera Traders vs. The Deputy State Tax Officer

Held

The Court quashed the impugned order dated 12.12.2025 and the consequential attachment order dated 14.07.2026. The case was remitted back to the respondent for de novo adjudication. This decision was based on the petitioner's submission that he was unable to file a reply to the Show Cause Notice due to his incarceration under the NDPS Act and his subsequent acquittal. The Court accepted the petitioner's undertaking to deposit 25% of the disputed tax in cash within thirty days from the receipt of the order. The petitioner was also directed to file a reply to the Show Cause Notice along with supporting documents within the same period. The respondent was directed to pass a fresh order on merits after considering the reply and the pre-deposit, preferably within three months. The Court also stipulated that if the petitioner failed to comply with these conditions, the respondent could proceed to recover the tax as if the writ petition was dismissed. The principle established is that a reasonable opportunity to be heard should be provided, even if the statutory appeal period has expired, especially when the inability to respond was due to circumstances beyond the petitioner's control, and the petitioner demonstrates willingness to comply with certain conditions.

Facts

The petitioner, MVS Veera Traders, represented by Mr. Veerendran, filed a writ petition challenging an order passed under Section 73 of the CGST/SGST Act, 2017, and a consequential attachment order. The impugned order, dated 12.12.2025, confirmed a proposal in a Show Cause Notice dated 09.09.2025, in the absence of a reply from the petitioner. The petitioner contended that he was unable to respond due to being incarcerated in connection with a crime registered under the NDPS Act. He was convicted on 30.03.2025 but later acquitted by the High Court on 16.01.2026. The writ petition was filed on 18.08.2026, after the limitation period for filing an appeal under Section 107 had expired. The petitioner offered to deposit 25% of the disputed tax.

Key Issues

1. Whether the impugned order and consequential attachment order, passed under Section 73 of the CGST/SGST Act, 2017, are liable to be quashed on the grounds of the petitioner's inability to respond to the Show Cause Notice due to incarceration and subsequent acquittal. (Question of mixed law and fact) Petitioner's contentions: The petitioner argued that his incarceration under the NDPS Act prevented him from filing a reply to the Show Cause Notice, thereby violating his right to natural justice. He relied on his subsequent acquittal as evidence of his bona fides and willingness to cooperate. He offered to deposit 25% of the disputed tax for de novo adjudication. Respondent's contentions: The respondent did not record any specific arguments in the judgment. However, the fact that the impugned order was passed in the absence of a reply to the Show Cause Notice implies that the respondent proceeded based on the available information.