Paavaki Traders vs. The Deputy State Tax Officer 2
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The petitioner, Tvl. Paavaki Traders, represented by its Proprietor P. Mathankumar, filed a writ petition challenging an order dated 23.12.2025 passed by the Deputy State Tax Officer 2, Nagercoil (Rural) Assessment Circle. This order, bearing reference GSTIN 33CTXPM3319J12Z7 /2021-22, was issued under Section 73 of the TNGST Act, 2017, for the tax period 2021-22. The petitioner contended that the order was cryptic, nonspeaking, illegal, arbitrary, and without jurisdiction. The impugned order was preceded by a Show Cause Notice dated 26.09.2025, to which the petitioner had not responded, leading to the ex-parte order. The writ petition was filed on 27.07.2026, after the limitation period for filing an appeal under Section 107 of the GST enactments had expired.
Held
The Court quashed the impugned order dated 23.12.2025. The reasoning was based on the petitioner's submission that their business of manufacturing and selling coco brooms is exempted under the GST enactments and their undertaking to pre-deposit 10% of the disputed tax. The Court directed the respondent to pass a fresh order after the petitioner deposits 10% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving the order. The petitioner was also directed to file a reply to the Show Cause Notice dated 26.09.2025, along with supporting documents, treating the impugned order as an addendum to the notice. The respondent was to pass a final order on merits within three months of the reply and pre-deposit. Failure to comply would allow the respondent to recover the tax as if the writ petition was dismissed. The Court explicitly stated that before passing any order, the respondent must give due notice to the petitioner. The ratio decidendi is that procedural fairness and an opportunity to present a defence, especially concerning potential exemptions, warrant a de novo adjudication when coupled with a willingness to pre-deposit a portion of the disputed tax, even if the statutory appeal period has expired.
Key Issues
1. Whether the impugned order dated 23.12.2025, passed under Section 73 of the TNGST Act, 2017, is liable to be quashed as cryptic, nonspeaking, illegal, arbitrary, and without jurisdiction. The petitioner argued that the order lacked proper reasoning and did not address their potential defence of exemption for their business of manufacturing and selling coco brooms. The petitioner also sought a fresh assessment after being heard. The respondent (Revenue) did not explicitly argue against the quashing of the order but noted that the petitioner had not availed the personal hearing opportunity and that the appeal period had expired. The court noted the petitioner's willingness to pre-deposit 10% of the disputed tax.
Sections Cited
Section 73, Section 107
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Before: and
M/s.P.Sudarkodi Natchiyar, learned Counsel for State of TN, 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 Counsel for State of TN for the respondent.
In this Writ Petition, the petitioner has challenged the impugned Order in GST DRC 07 dated 23.12.2025 bearing reference in GSTIN 33CTXPM3319J12Z7 /2021-22 passed under Section 73 of the respective GST enactments, 2017, for the tax period 2021-22, which was preceded by a Show Cause Notice in GST DRC 01 dated 26.09.2025, wherein the petitioner was also called upon to appear for personal hearing. However, the petitioner had not taken 2/6 https://www.mhc.tn.gov.in/judis advantage of the same and thus, suffered the impugned Order dated 23.12.2025. 4. 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 27.07.2026. 5. At this stage, the learned counsel for the petitioner submits that as the petitioner is engaging in manufacturing and selling of coco brooms, the supply made by the petitioner is exempted under the provisions of respective GST enactments, 2017 and however, the petitioner is willing to pre-deposit 10% of the disputed tax as confirmed by the impugned order 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 writ petitioner undertakes to pay 10% of the disputed tax.”
In view of the above, the impugned order is quashed and the case is 3/6 https://www.mhc.tn.gov.in/judis 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. The above concession is given only in view of the submission made by the learned counsel for the petitioner that the supply made by the petitioner is exempted under the provisions of respective GST enactments, 2017. 8. Within such time, the petitioner shall also file a reply to the Show Cause Notice in GST DRC 01 dated 26.09.2025 together with requisite documents to substantiate the case by treating the Impugned Order dated 23.12.2025 as an addendum to the Show Cause Notice dated 26.09.2025. 9. 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 4/6 https://www.mhc.tn.gov.in/judis 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. Index : Yes / No 29.07.2026 Internet : Yes / No apd To The Deputy State Tax Officer 2, Nagercoil (Rural) Assessment Circle, Commercial Taxes Buildings, Nagercoil. 5/6 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
apd
2026 6/6 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.