Munnar Spices vs. The Deputy State Tax Officer Ii
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The petitioner, Munnar Spices, filed a writ petition challenging a Summary of Show Cause Notice (DRC-01) dated September 25, 2025, and an impugned order dated December 22, 2025, passed by the Deputy State Tax Officer II for the financial year 2021-22. The petitioner contended that they deal in exempted products and were suffering from health issues during the period in dispute. The respondent had issued an intimation in ASMT-10 on August 25, 2025, which was not replied to. The petitioner claimed that a part of the tax amount had already been recovered and expressed willingness to pre-deposit 10% of the disputed tax for a fresh adjudication.
Held
The Court quashed the impugned order dated December 22, 2025, and remitted the case back to the respondent for a fresh adjudication. This decision was made subject to the petitioner depositing 10% of the disputed tax in cash, after deducting the amount already recovered, within thirty days of receiving a copy of the order. The tax amount already recovered would be subject to verification. The petitioner was also directed to file a reply to the Show Cause Notice (DRC-01) dated September 25, 2025, along with supporting documents, treating the impugned order as an addendum to the show cause notice. The respondent was instructed to pass a final order on merits within three months of the petitioner's compliance. The Court also added a direction for the respondent to lift the attachment of the petitioner's bank account forthwith, following a subsequent submission by the petitioner. The Court noted that there were no records to substantiate the petitioner's claim of dealing in exempted commodities, but still granted relief based on the willingness to pre-deposit and the need for natural justice.
Key Issues
1. Whether the impugned order passed by the Respondent is illegal, arbitrary, and violative of the principles of natural justice, considering the petitioner's claim of dealing in exempted products and their failure to respond to the notices due to alleged health reasons? (Mixed question of law and fact, concerning principles of natural justice and the validity of the assessment under the GST enactments). Petitioner's arguments: The petitioner argued that they are engaged in the sale of exempted products. They also submitted that they were suffering from health issues (lower back pain and diabetes) during the disputed period, which prevented them from responding to the notices. They further agreed to pre-deposit 10% of the disputed tax, less the amount already recovered, for a fresh adjudication. Respondent's arguments: The respondent did not explicitly present arguments in the judgment. However, the impugned order was passed in the absence of a reply to the show cause notice.
Sections Cited
Section 73, Section 129
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Before: and
Mr.R.Parthiban, learned Special Government Pleader, 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 learned Special Government Pleader for the respondent.
The petitioner is before this Court against the Impugned Order dated 22.12.2025 bearing reference in Ref.No.ZD331225346500U for the tax period 2021-22, whereby the demand proposed in the Show Cause Notice in DRC-01 dated 25.09.2025 has been confirmed in the absence of a reply. The impugned order was also preceded by an intimation in ASMT-10 dated 25.08.2025, which was also not replied to. 2/8 https://www.mhc.tn.gov.in/judis
The case of the petitioner is that the petitioner is engaged in the sale/supply of exempted products. However, based on an assumption that the petitioner may have dealt with coffee, tea, mate and spices, the petitioner may be liable to pay tax at 2.5% each under the respective GST enactments, 2017. 5. That apart, learned counsel for the petitioner would submit that the petitioner is a small trader and is engaged in the sale of spices and that during the period in dispute, the petitioner was suffering from lower back pain radiating to the lower limbs and diabetic.
At this stage, the learned counsel for the petitioner submits that a part of the tax amount has already been recovered. However, the petitioner is willing to pre-deposit 10% of the disputed tax as a condition for de novo adjudication, less the amount already recovered.
The learned counsel for the petitioner has also made an endorsement to that effect in the Court Bundle, which is extracted hereunder:-
“The petitioner agrees to pay 10% of disputed tax.” 3/8 https://www.mhc.tn.gov.in/judis
Although the petitioner may have a case on merits, the fact remains that there are no records available to substantiate that the petitioner was indeed engaged in the supply of exempted commodities. Be that as it may, I am inclined to quash the impugned order and to remit this case back to the respondent to pass a fresh order, subject to the petitioner depositing 10% of the disputed tax in cash, after deducting the amount already recovered, 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. The tax amount already recovered shall be subject to verification.
Within such time, the petitioner shall also file a reply to the Show Cause Notice in DRC 01 dated 25.09.2025 together with requisite documents to substantiate the case by treating the Impugned Order dated 22.12.2025 as an addendum to the Show Cause Notice dated 25.09.2025. 4/8 https://www.mhc.tn.gov.in/judis
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.
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 Petitions are closed. Index : Yes / No 10.08.2026 Internet : Yes / No apd 5/8 https://www.mhc.tn.gov.in/judis apd To The Deputy State Tax Officer II, Commercial Tax Building, 43/1, Kollam Main Road, Sengottai - 627 809. 10.08.2026 6/8 https://www.mhc.tn.gov.in/judis This Writ Petition is listed today under the caption “for being mentioned” at the instance of the learned counsel for the petitioner.
The learned counsel for the petitioner submits that, though the petitioner has complied with the order passed by this Court, the bank account of the petitioner has not been defreezed. It is further submitted that there are no other dues under the respective GST enactments.
Considering the aforesaid submission, the following sentence shall be added at the end of paragraph 12 of the order dated 10.08.2026: The respondent is directed to lift the attachment of the petitioner’s bank account forthwith. 22.09.2026 smn2 Note:- Registry is directed to add the aforesaid sentence and issue fresh order copy. 7/8 https://www.mhc.tn.gov.in/judis smn2
2026 8/8 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.