Tvl. Sri Sastha Agency vs. The Deputy State Tax Officer-2/

Held

The Court quashed the impugned assessment order dated December 22, 2025. The case was remitted back to the respondent for fresh adjudication. This decision was made conditional upon the petitioner depositing 25% of the disputed tax in cash from their Electronic Cash Register, after deducting the amount already recovered, within thirty days of receiving the order. The petitioner was also directed to file a reply to the show cause notice dated September 18, 2025, along with supporting documents, treating the impugned order as an addendum to the show cause notice. The respondent was directed to pass a final order on merits expeditiously, preferably within three months of the petitioner's compliance. The Court noted that the recovery of the deposited amount would be subject to verification. If the petitioner failed to comply with these stipulations, the respondent was at liberty to proceed with recovery as if the writ petition was dismissed. The Court explicitly stated that due notice would be given to the petitioner before passing any final order. The ratio decidendi is that in exceptional circumstances, particularly when the assessee demonstrates willingness to comply with pre-deposit conditions and address the merits, a High Court may entertain a writ petition even after the expiry of the statutory appeal period, to ensure a fair adjudication.

Facts

The petitioner, Tvl. Sri Sastha Agency, filed a writ petition challenging an assessment order dated December 22, 2025, issued by the Deputy State Tax Officer-2 for the tax period 2021-22. This order followed a show cause notice dated September 18, 2025, to which the petitioner had not responded nor availed the personal hearing. The writ petition was filed on August 18, 2026, after the limitation period for filing an appeal under Section 107 of the GST enactments had expired. The petitioner stated that 10% of the disputed tax had already been recovered and expressed willingness to pre-deposit 25% of the disputed tax, after deducting the amount already recovered, as a condition for fresh adjudication.

Key Issues

1. Whether the High Court, in its writ jurisdiction, should entertain a challenge to an assessment order when the statutory appeal period has expired, especially when the petitioner failed to respond to the show cause notice and personal hearing? Petitioner's argument: The petitioner argued that they are willing to pre-deposit 25% of the disputed tax demand, after deducting the amount already recovered, to facilitate a de novo adjudication. They have made an endorsement to this effect. Revenue's argument: The judgment does not record any specific arguments made by the respondent revenue authority. However, the context implies the respondent would likely rely on the petitioner's failure to exhaust the statutory remedy and the expired appeal period.