Tvl. Pgs Traders vs. The State Tax Officer/Commercial Tax Officer

Facts

The petitioner, Tvl. PGS Traders, represented by its Proprietor Sasikala, filed a writ petition before the Madurai Bench of the Madras High Court challenging an assessment order dated December 25, 2025, passed by the respondent, The State Tax Officer/Commercial Tax Officer, Madurai Rural West Assessment Circle. The assessment pertains to the year 2021-22. The impugned order was preceded by a show cause notice dated October 7, 2023, and a reminder dated November 27, 2023, which called for a reply and personal hearing. The petitioner failed to file a reply or appear for the personal hearing, leading to the ex-parte assessment order. The petitioner expressed willingness to pre-deposit 25% of the disputed tax.

Held

The Court quashed the impugned assessment order dated December 25, 2025, and remitted the case back to the respondent for de novo adjudication. This decision was based on the petitioner's willingness to pre-deposit 25% of the disputed tax. The Court directed the petitioner to deposit this amount in cash from their electronic cash register within thirty days of receiving the order. Additionally, the petitioner must file a reply to the show cause notice dated October 7, 2023, along with supporting documents, treating the impugned order as an addendum to the show cause notice. Upon compliance, the respondent is to pass a fresh order on merits within three months. The attachment of the petitioner's bank account, if any, will be vacated subject to the deposit and the petitioner not being in arrears for other tax periods. If the petitioner fails to comply, the respondent can proceed with recovery as if the writ petition was dismissed. The Court expressly stated that the respondent must issue due notice before passing any further order.

Key Issues

1. Whether the assessment order dated December 25, 2025, passed by the respondent for the year 2021-22 is liable to be quashed as illegal and devoid of merits, and if so, whether the respondent should be directed to redo the assessment proceedings. The petitioner argued that the assessment order was passed without proper adjudication, as they did not get an opportunity to file a reply or attend the personal hearing. The petitioner is willing to pre-deposit 25% of the disputed tax to facilitate a fresh adjudication. The respondent, represented by the State counsel, did not record any specific arguments against the petitioner's plea for a fresh adjudication, having consented to the disposal of the writ petition at the admission stage.