M/S.S.S.Traders vs. The State Tax Officer
Original PDF →Facts
The petitioner, M/s.S.S.Traders, represented by its Proprietor C.Subburaj, filed a Writ Petition challenging an Assessment Order dated 29.12.2025, issued by the Respondent, the State Tax Officer. This order confirmed the proposals in a Show Cause Notice dated 28.09.2025, which was issued for the period April 2021 to March 2022. The petitioner contended that they had indeed filed a reply to the Show Cause Notice, contrary to the Respondent's assertion in the impugned order. However, the Court noted that the reply filed by the petitioner was 'sketchy' and lacked substantiating documents. The limitation period for filing an appeal under Section 107 of the GST enactments had expired, and the Writ Petition was filed on 04.08.2026. The petitioner offered to pre-deposit 10% of the disputed tax for de novo adjudication.
Held
The Court quashed the impugned Assessment Order dated 29.12.2025. The primary reasoning was that while the petitioner's reply to the Show Cause Notice was admittedly 'sketchy' and lacked substantiation, the Respondent's order erroneously stated that no reply was filed. Given that the limitation period for appeal had expired and the Writ Petition was filed belatedly, the Court, in the interest of natural justice and based on the petitioner's undertaking, decided to remit the matter back to the Respondent for a fresh adjudication. The ratio decidendi is that even if a reply is weak, an order confirming proposals without acknowledging its existence, especially when the taxpayer offers a substantial pre-deposit, warrants reconsideration. The operative direction was to remit the case back to the Respondent, subject to the petitioner depositing 10% of the disputed tax in cash within thirty days and filing a comprehensive reply to the Show Cause Notice with supporting documents. The Respondent was directed to pass a fresh order on merits within three months of compliance. The Court also stipulated that if the petitioner failed to comply, the Respondent could proceed with recovery as if the Writ Petition was dismissed.
Key Issues
1. Whether the impugned Assessment Order dated 29.12.2025, issued by the Respondent, is liable to be quashed for being without jurisdiction and in violation of statutory provisions, particularly concerning the alleged non-filing of a reply to the Show Cause Notice dated 28.09.2025? The Petitioner argued that they had filed a reply to the Show Cause Notice, and the Respondent's confirmation of the proposals in the impugned order, stating no reply was filed, was factually incorrect. The Petitioner also highlighted the procedural irregularities and the lack of proper consideration of their defense. The Petitioner further offered to pre-deposit 10% of the disputed tax as a condition for a fresh adjudication. The Respondent, represented by the Government Advocate (Taxes), did not appear to have made specific arguments against the Petitioner's submissions regarding the procedural aspects or the alleged non-consideration of the reply. The Court's decision was primarily based on the Petitioner's submissions and offer.
Sections Cited
Section 107
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Cause title — parties, addresses and appearances
ORDER
M/s.P.Sudarkodinachiar, learned Government Advocate (Taxes), takes notice for the respondent.
This Writ Petition is taken up for final hearing at the time of admission with the consent of the learned counsel for the petitioner and the learned Government Advocate(Taxes) for the respondent.
In this Writ Petition, the petitioner has challenged the impugned Assessment Order in GSTIN 33HHKPS9925J1ZI/2021-22 dated 29.12.2025 in DRC-07 bearing Ref.No.ZD331225433331X G dated 29.12.2025 of the Respondent, which was preceded by a Show Cause Notice in Form DRC 01 dated 28.09.2025 wherein the petitioner was also called upon to appear for personal hearing.
The learned counsel for the petitioner submits that the petitioner has indeed replied to the show cause notice and the impugned 2/6 order dated 29.12.2025 whereby proposal in show cause notice dated 28.09.2025 issued for April 2021 to March 2022 has been confirmed stating that the petitioner has not filed a reply.
However, a copy of the reply indicates that the petitioner has indeed replied to the show cause notice, but, the same is a sketchy reply, without any document to substantiate the defense and thus, suffered the Impugned Order dated 29.12.2025. 6. It is noticed that the limitation for filing an appeal under Section 107 of the respective GST enactments, 2017 against the Impugned Order has already expired. The present Writ Petition has been filed only on 04.08.2026. 7. At this stage, the learned counsel for the petitioner submits that the petitioner is willing to pre-deposit 10% of the disputed tax as a condition for de novo adjudication.
The learned counsel for the petitioner has also made an endorsement to that effect in the Court Bundle, which is extracted 3/6 hereunder:-
“Petitioner undertakes to pay 10% of tax, if not recovered”
In view of the above, the impugned order is quashed and the case is remitted back to the respondent to pass a fresh order subject to the petitioner depositing 10% of the disputed tax in cash from the petitioner's Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order.
Within such time, the petitioner shall also file a reply to the Show Cause Notice in DRC 01 dated 28.09.2025 together with requisite documents to substantiate the case by treating the Impugned Order dated 29.12.2025 as an addendum to the Show Cause Notice dated 28.09.2025. 11. In case the petitioner complies with the above stipulations, the respondent shall proceed to pass a final order on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months of such reply / pre-deposit.
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In case the petitioner fails to comply with any of the stipulations, the respondent is at liberty to proceed against the petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine today.
Needless to state, before passing any such order, the ... respondent shall give due notice to the petitioner.
This Writ Petition stands disposed of, with the above observations. No costs. Consequently, connected Writ Miscellaneous Petition is closed.
2026 CM TO The State Tax Officer, Nilakottai Assessment Circle, Commercial Tax Building, Nilakottai. 5/6 C.SARAVANAN,J CM and WMP(MD)No.17105 of 2026 Date : 12/08/2026 6/6
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.