Tvl. V.P.Sivasakthi Maligai vs. The Deputy State Tax Office - 1(Fac)

Facts

The petitioner, Tvl. V.P. Sivasakthi Maligai, represented by its Proprietor S. Senthilvel Pandian, filed a writ petition challenging an assessment order dated February 20, 2025, issued by the Deputy State Tax Officer - 1(FAC) for the tax period 2020-21. The assessment order was based on a show cause notice dated November 26, 2024, and subsequent reminders. The petitioner failed to file a reply or appear for personal hearings. The respondent is the Deputy State Tax Officer. The amount in dispute is not explicitly stated, but the petitioner had deposited 25% of the disputed tax. The procedural history involves the issuance of a show cause notice, reminders, the petitioner's non-compliance, the passing of the impugned order, and the present writ petition.

Held

The Court quashed the impugned assessment order dated February 20, 2025, and remitted the case back to the respondent for passing a fresh order in accordance with law. The Court reasoned that while the petitioner failed to respond to the show cause notice and attend hearings, the admission by the respondent's counsel regarding the petitioner's deposit of 25% of the disputed tax warranted a reconsideration. The ratio decidendi is that in cases where a significant portion of the disputed tax has been paid and there is a procedural lapse by the assessee, the tax authority should grant an opportunity to rectify the lapse and pass a fresh order on merits, rather than upholding an ex-parte assessment. The operative direction is for the petitioner to file a reply to the show cause notice within 30 days, treating the impugned order as an addendum. The respondent is to pass a fresh order within three months of receiving the reply. The attachment of the petitioner's bank account, if any, shall be vacated upon compliance, provided there are no other arrears.

Key Issues

1. Whether the impugned assessment order dated February 20, 2025, passed by the respondent is illegal and devoid of merits, necessitating its quashing and a direction to redo the assessment proceedings for the year 2020-21, under Article 226 of the Constitution of India. Petitioner's contention: The petitioner argued that the impugned order should be quashed and the assessment redone. The petitioner's counsel submitted that the petitioner had already deposited 25% of the disputed tax, which was admitted by the respondent's counsel. Respondent's contention: The respondent's counsel admitted that the petitioner had deposited 25% of the disputed tax. The respondent had passed the impugned order due to the petitioner's failure to file a reply to the show cause notice and appear for personal hearings.