Tvl.Paranjothi Traders vs. The Deputy State Tax Officer -2
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The petitioner, Tvl. Paranjothi Traders, is challenging an order dated 20.12.2025 passed by the Deputy State Tax Officer-2, Theni. This order confirmed a proposal in a Show Cause Notice dated 26.09.2025 for the tax period April 2021 to March 2022. The petitioner claims to deal in raw garlic, which is an exempted supply, and therefore not liable to pay tax. The disputed tax amount was recovered from the petitioner's bank account on 28.07.2026. The petitioner contends the impugned order was passed without considering their reply and supporting documents.
Held
The Court held that the impugned order dated 20.12.2025 was passed in the absence of a reply from the petitioner. Considering the petitioner's contention that they are engaged in the supply of exempted goods, the Court found it appropriate to remit the case back to the respondent for a fresh order. The petitioner is directed to file a reply to the Show Cause Notice dated 26.09.2025, along with supporting documents, within thirty days of receiving the order. The respondent is to pass a final order on merits within three months of receiving the reply, after providing due notice to the petitioner. If the petitioner fails to file the reply within the stipulated period, the respondent is at liberty to proceed with recovery as if the writ petition was dismissed. The Court did not decide on the merits of the petitioner's claim regarding exempted goods.
Key Issues
1. Whether the impugned order dated 20.12.2025, confirming the demand in the absence of a reply from the petitioner, is sustainable in law, particularly in light of the petitioner's claim of dealing in exempted goods? (Question of law and fact, turning on principles of natural justice and GST provisions related to assessment and demand). Petitioner's Arguments: The petitioner argued that the impugned order was passed without affording them an opportunity to file their objections and supporting documents. They asserted that their business involves the supply of raw garlic, which is exempted from GST under relevant notifications, thus they are not liable for the tax demanded. They also highlighted that the entire disputed amount was recovered from their bank account. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or State.
Sections Cited
GST DRC-01, GST DRC-07
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Before: and
In this Writ Petition, the petitioner is aggrieved by the impugned order dated 20.12.2025, whereby the proposal contained in the Show Cause Notice in GST DRC-01 dated 26.09.2025 for the tax period from April 2021 to March 2022 has been confirmed in the absence of a reply.
The case of the petitioner is that the petitioner is engaged in the supply of raw garlic, which is exempted under the relevant Exemption Notification, and that the petitioner is, therefore, not liable to pay tax. It is submitted that the entire disputed tax confirmed by the impugned order has been recovered directly from the petitioner's bank account on 28.07.2026. 3. The learned counsel for the petitioner has taken this Court through the bank statement relating to the petitioner's bank account, wherein a sum of Rs.3,86,792/- has been recovered from the petitioner's bank account on 28.07.2026. This corresponds to the amount confirmed towards tax, interest and penalty under the impugned order dated 20.12.2025. 4. Considering the fact that the impugned order has been passed in the absence of a reply and also considering the fact that the petitioner is stated to be engaged in the supply of exempted goods, I am inclined to remit the case back to the respondent to pass a fresh order on merits and in accordance with law. https://www.mhc.tn.gov.in/judis __________ Page3 of 5
The petitioner shall also file a reply to the Show Cause Notice in DRC-01 dated 26.09.2025, together with the requisite documents to substantiate the case, by treating the impugned order dated 20.12.2025 as an addendum to the Show Cause Notice dated 26.09.2025, within a period of thirty (30) days from the date of receipt of a copy of this order.
The respondent shall thereafter 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 from the date of receipt of such reply.
In the event of the petitioner failing to file a reply within the aforesaid period, the respondent shall be at liberty to proceed against the petitioner for recovery of 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 respondent shall give due notice to the petitioner. https://www.mhc.tn.gov.in/judis __________ Page4 of 5
This Writ Petition stands disposed of with the above observations. No costs. Consequently, the connected Writ Miscellaneous Petition is closed. 11-08-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No smn2 To The Deputy State Tax Officer -2 cum Deputy Commercial Tax Officer, Theni -1 Assessment Circle, Theni https://www.mhc.tn.gov.in/judis __________ Page5 of 5 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.