Tvl. Ethan Exports vs. The State Tax Officer

Held

The Court quashed the impugned assessment order dated December 17, 2025, and the appellate order dated June 2, 2026. The case was remitted back to the first respondent for a fresh order. This was subject to the petitioner depositing 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 September 26, 2025, along with supporting documents, treating the impugned order as an addendum to the Show Cause Notice. The first respondent was instructed to pass a final order on merits within three months of the reply and pre-deposit, after giving due notice to the petitioner. Failure to comply with these stipulations would allow the respondents to proceed with recovery as if the writ petition was dismissed. The Court noted that the petitioner had already deposited 10% of the disputed tax.

Facts

The petitioner, Tvl. Ethan Exports, filed a writ petition challenging an order dated December 17, 2025, passed by the State Tax Officer (first respondent) for the tax period 2021-2022, which confirmed a proposal in a Show Cause Notice dated September 26, 2025, due to the absence of a reply. The petitioner had previously filed an appeal before the Deputy Commissioner (CT) (First Appellate Authority), which was rejected by an order dated June 2, 2026. At the time of filing the appeal, the petitioner had 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 in the absence of a reply to the Show Cause Notice, is in violation of the principles of natural justice, particularly concerning Section 73 of the CGST Act, 2017? Petitioner's contention: The petitioner argued that the impugned order was passed without considering their response, thus violating natural justice principles. They offered to deposit an additional 15% of the disputed tax. Respondents' contention: The learned Government Advocate (Taxes) for the respondents had no objection to remitting the case back to the first respondent on the condition of further pre-deposit.