Tvl.Ethan Exports vs. The State Tax Officer

Held

The Court quashed both the impugned assessment order dated 11.12.2025 passed by the first respondent and the consequential order dated 02.06.2026 passed by the Appellate Authority. The case was remitted back to the first respondent with directions for the petitioner to deposit a further 15% of the disputed tax in cash within thirty days of receiving the order. The petitioner was also directed to file a reply to the Show Cause Notice dated 13.09.2025, along with supporting documents, treating the impugned order as an addendum to the Show Cause Notice. The first respondent was directed to pass a fresh order on merits after receiving the reply and pre-deposit, preferably within three months. The Court also stipulated that if the petitioner failed to comply with these conditions, the respondents would be at liberty to recover the tax as if the writ petition was dismissed. The principles of natural justice were implicitly addressed by allowing the petitioner to file a reply and directing a fresh adjudication.

Facts

The petitioner, Tvl. Ethan Exports, filed a writ petition challenging an order dated 11.12.2025 passed by the State Tax Officer for the tax period 2021-2022, which confirmed a Show Cause Notice in the absence of a reply. The petitioner had previously filed an appeal before the Deputy Commissioner (CT), the First Appellate Authority, on 27.04.2026, which was rejected by an order dated 02.06.2026. At the time of filing the appeal, the petitioner had already deposited 10% of the disputed tax. The petitioner expressed readiness to deposit an additional 15% of the disputed tax to secure the revenue's interest.

Key Issues

1. Whether the impugned order passed by the first respondent, confirming the demand without considering a reply from the petitioner, violates the principles of natural justice, particularly concerning the absence of a proper opportunity to be heard? 2. Whether the appellate order, which rejected the appeal without addressing the petitioner's grievance regarding the lack of opportunity to file a reply, is sustainable? Petitioner's arguments: The petitioner contended that the impugned order was passed in gross violation of the principles of natural justice as no proper opportunity was given to file a reply to the Show Cause Notice. The petitioner also indicated a willingness to deposit a further 15% of the disputed tax. Revenue's arguments: The learned Government Advocate (Taxes) for the respondents had no objection to remitting the case back to the first respondent on the terms proposed by the petitioner.