M/S.Sri Lakshmi Machine Works vs. The Proper Officer / State Tax Officer
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The petitioner, M/s. Sri Lakshmi Machine Works, filed a writ petition challenging an order dated 01.12.2025 passed by the Proper Officer/State Tax Officer. This order was issued after a Show Cause Notice dated 09.09.2025, to which the petitioner claims not to have filed a reply or been given an opportunity to submit documents. The impugned order led to the attachment of the petitioner's bank account with Karur Vysya Bank. The writ petition was filed on 31.07.2026, after the limitation period for filing an appeal under Section 107 of the GST enactments had expired. The petitioner expressed willingness to pre-deposit 25% of the disputed tax.
Held
The Court quashed the impugned order dated 01.12.2025 and remitted the case back to the first respondent for de novo adjudication. This decision was contingent upon the petitioner depositing 25% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving the order. Any prior payments made would be adjusted towards this pre-deposit. The petitioner was also directed to file a reply to the Show Cause Notice dated 09.09.2025, along with supporting documents, within the same period, treating the impugned order as an addendum to the show cause notice. The Court reasoned that this approach would allow for a fresh consideration of the matter on merits, subject to the petitioner's compliance. If the petitioner complied, the bank account attachment would be automatically lifted. The Court also stipulated that if the petitioner failed to comply with these conditions, the revenue was at liberty to proceed with recovery as if the writ petition had been dismissed. The Court expressly noted that the bank attachment would be lifted only upon the deposit and if the petitioner was not in arrears for any other tax period.
Key Issues
1. Whether the impugned order dated 01.12.2025, passed by the Proper Officer/State Tax Officer, is liable to be quashed due to lack of opportunity for the petitioner to file a reply and submit documents, and if so, what relief should be granted? The petitioner argued that the impugned order was passed without providing an adequate opportunity to submit a reply to the Show Cause Notice and to substantiate their case with documents. The petitioner also highlighted that the limitation period for filing an appeal had expired, necessitating the present writ petition. The petitioner offered to pre-deposit 25% of the disputed tax as a condition for de novo adjudication. The revenue, represented by the Government Advocate (Taxes), did not explicitly record arguments against the petitioner's plea for a fresh adjudication, but rather accepted notice and the subsequent directions.
Sections Cited
Section 107
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Before: and
Ms.P.Sudarkodinachiar, learned Government Advocate (Taxes) takes notice for the first respondent. Mr.Sugumar, learned Standing Counsel takes notice for the second 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, learned Government Advocate for the first respondent and the learned Standing Counsel for the second respondent.
In this Writ Petition, the petitioner has challenged the Impugned Order of the first respondent, dated 01.12.2025 bearing reference in GSTIN ZD3312250073305/2021-22. 4. The Impugned Order was preceded by a Show Cause Notice in GST DRC 01 dated 09.09.2025, and the petitioner has not filed his reply and the petitioner had not been provided an opportunity to submit documents to substantiate the same and thus, suffered the Impugned Order dated 01.12.2025. https://www.mhc.tn.gov.in/judis __________ Page3 of 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 31.07.2026. 6. At this stage, the learned counsel for the petitioner submits that the petitioner is willing to pre-deposit 25% 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 hereunder:- “The petitioner is ready to deposit 25% of the disputed tax amount.”
In view of the above, the impugned order is quashed and the case is remitted back to the first respondent to pass a fresh order subject to the petitioner depositing 25% 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, subject to any payment made already shall be adjusted to aforesaid pre-deposit.
Within such time, the petitioner shall also file a reply to the Show Cause Notice in DRC 01 dated 09.09.2025 together with requisite documents to https://www.mhc.tn.gov.in/judis __________ Page4 of 6 substantiate the case by treating the Impugned Order dated 01.12.2025 as an addendum to the Show Cause Notice dated 09.09.2025. 10. 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. Subject to the petitioner complying with the above stipulations, the attachment of the bank account of the petitioner shall also stand automatically lifted.
It is made clear that bank attachment shall be lifted subject to the deposit of 25% of the disputed tax as ordered above and the petitioner not being in arrears of any other amount for any other tax period barring the amount demanded under the impugned Order.
In case the petitioner fails to comply with any of the stipulations, the first respondent is at liberty to proceed against the petitioner to recover the tax in accordance with law as if this Writ Petition had been dismissed in limine today.
Needless to state, before passing any such order, the first respondent shall give due notice to the petitioner. https://www.mhc.tn.gov.in/judis __________ Page5 of 6
This Writ Petition stands disposed of, with the above observations. No costs. Consequently, connected Writ Miscellaneous Petitions are closed. 11-08-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No smn2 To 1. The Proper Officer / State Tax Officer, Office of the Assistant Commissioner (ST), Dindigul Rural Circle, Dindigul District
The Branch Manager Karur Vysya Bank, P.B.No.21, No.7, Varadaraj Complex, Main Road, Dindigul District https://www.mhc.tn.gov.in/judis __________ Page6 of 6 C.SARAVANAN, J. smn2 11-08-2026 https://www.mhc.tn.gov.in/judis
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.