Tvl. A.K.Hollow Bricks And Interlocks vs. The State Tax Officer (Adjudication And Legal)/ The Commercial Tax Officer
Original PDF →Facts
The petitioner, Tvl. A.K. Hollow Bricks and Interlocks, represented by its Proprietor Manoj, filed a writ petition challenging an assessment order dated March 24, 2026, passed by the respondent, the State Tax Officer (Adjudication and Legal). This order followed an inspection under Section 67 of the GST enactment. The petitioner had failed to provide particulars requested during the inspection and did not respond to a show cause notice (GST DRC 01) dated January 19, 2026. However, the petitioner claimed to have discharged the tax liability during the inspection, which was appropriated in the impugned order. The petitioner sought to quash the order and have the assessment redone for the year 2023-24.
Held
The Court decided to grant the petitioner one opportunity to explain their case. The reasoning was based on the petitioner's submission that they were engaged in transportation of goods with an exempted turnover and the fact that no reply was filed to the show cause notice. The Court treated the impugned order dated March 24, 2026, as an addendum to the show cause notice dated January 19, 2026. The petitioner was directed to file a reply to the show cause notice within 30 days of receiving the order. Upon compliance, the respondent was to pass fresh orders on merits after hearing the petitioner, preferably within three months. If the petitioner failed to comply, the respondent was at liberty to proceed as if the writ petition was dismissed. The ratio is that a taxpayer should be given an opportunity to explain their position, especially when a claim of exemption is made, even if procedural lapses occurred, provided they comply with the court's directions.
Key Issues
1. Whether the petitioner should be granted an opportunity to explain their business operations and tax liability, particularly concerning the transportation of goods and claimed exemptions, despite not replying to the show cause notice? The petitioner argued that they should be given one opportunity to explain that their business involved transportation of goods, and the entire turnover was exempted as tax was payable by the recipient. The respondent, represented by the State of Tamil Nadu, did not record any specific arguments against this plea, but the Court noted that no reply was filed by the petitioner to the show cause notice.
Sections Cited
Section 67, GST DRC 01
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Before: and
Mr.S.Venkatesh, learned counsel for the State of Tamil Nadu, takes notice for the respondent. 2.By consent, this writ petition is disposed of at the time of admission after hearing the learned counsel for the State of Tamil Nadu appearing for the petitioner and the learned counsel for the respondent. 3.The petitioner has challenged the impugned order passed by the respondent bearing Ref.No.GSTIN:33CHWPM6631C1Z7/2023-24 and in summary order Ref.No.ZD3303262041323 dated 24.03.2026, which has preceded an inspection under Section 67 of the respective GST enactment, for which, the petitioner failed to respond to give particulars called for during the course of inspection. 4.The petitioner was issued with the show cause notice in GST DRC 01, dated 19.01.2026, which was also not replied to. However, it is noticed that during the course of inspection, the petitioner has already discharged the tax liability, which has also been appropriated in the impugned order. 2/5 https://www.mhc.tn.gov.in/judis
The learned counsel for the petitioner submits that the petitioner may be given one opportunity to explain that the petitioner was engaged in transportation of goods and that the entire business turnover was exempted in terms of the notification as tax was to be paid by the recipient. 6.Having considered the submissions made by the learned counsel for the petitioner and the learned counsel for the State of Tamil Nadu appearing for the respondent, taking note of the fact that the tax demanded has been confirmed and considering the fact that no reply was filed, this Court is inclined to remit the case back to the respondent to pass a fresh order in lieu of the impugned order, subject to the petitioner filing a reply to the show cause notice issued in GST DRC 01 dated 19.01.2026 by treating the impugned order dated 24.03.2026 as an addendum to the show cause notice dated 19.01.2026, within a period of 30 days from the date of receipt of a copy of this order. 7.In case the petitioner complies with the above stipulation, the respondent shall proceed to pass fresh orders on merits and in accordance with law as expeditiously as possible preferably within a period of three (3) months thereafter, after hearing the petitioner. 3/5 https://www.mhc.tn.gov.in/judis
In case the petitioner fails to comply with the condition stipulated above, the respondent is at liberty to proceed against the petitioner in accordance with law as if this Writ Petition was dismissed in limine today. 9.It is made clear that the petitioner shall cooperate with the respondent and furnish all the documents including the reply within the time stipulated above to substantiate their case. 10.This Writ Petition is disposed of, with the above observations. No costs. Consequently, connected Miscellaneous Petition is closed. Index : Yes / No 16.07.2026 Internet : Yes / No mm To The State Tax Officer (Adjudication and Legal)/ The Commercial Tax Officer O/o.The Joint Commissioner (ST) (Intelligence) Tirunelveli Intelligence Division Tirunelveli. 4/5 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
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2026 5/5 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.