Tvl. M. Mani vs. The Deputy State Tax Officer

Facts

The petitioner, Tvl. M. Mani, a works contractor, filed a writ petition before the Madurai Bench of the Madras High Court challenging an assessment order dated January 13, 2026, passed by the Deputy State Tax Officer, Sivagangai. The order was for the financial year 2024-25. The petitioner contended that the impugned order was passed without a reply to the show cause notice that preceded it and was therefore without jurisdiction and in violation of statutory provisions. The respondent, represented by the Counsel for the State of Tamil Nadu, had no objection to the case being remitted back for a fresh order.

Held

The Court quashed the impugned assessment order dated January 13, 2026, subject to the petitioner depositing 25% of the disputed tax in cash within thirty days of receiving a copy of the order. The Court directed the petitioner to file a reply to the notice that preceded the impugned order, treating the impugned order as an addendum to the Show Cause Notice. If the petitioner complied with these conditions, the respondent was directed to pass fresh orders on merits and in accordance with law, preferably within three months after hearing the petitioner. The Court also stipulated that if the petitioner failed to comply with any of the conditions, the respondent would be at liberty to proceed against the petitioner as if the writ petition was dismissed in limine. The ratio decidendi is that procedural fairness, including the consideration of a taxpayer's response to a show cause notice, is paramount, and orders passed in violation thereof may be set aside, with a condition of partial deposit for de novo adjudication.

Key Issues

1. Whether the assessment order dated January 13, 2026, passed by the Deputy State Tax Officer, Sivagangai, for the financial year 2024-25, is liable to be quashed for being passed without considering the petitioner's reply to the show cause notice, thus violating statutory provisions and acting without jurisdiction? The petitioner argued that the impugned order was passed without addressing their response to the show cause notice, rendering it jurisdictionally flawed and violative of procedural fairness. The petitioner offered to deposit 25% of the disputed tax as a condition for de novo adjudication. The respondent, represented by the Counsel for the State of Tamil Nadu, did not contest the petitioner's plea for a fresh adjudication and had no objection to the case being remitted back to the respondent for passing a fresh order.