R Rajkumar vs. The State Tax Officer

Facts

The petitioner, R. Rajkumar, filed a Writ Petition before the Madurai Bench of the Madras High Court challenging an order dated 29.12.2025, passed by the respondent, The State Tax Officer, West Veli Street Assessment Circle, Madurai. This order was issued under Section 73 of the respective GST enactments for the Financial Year 2021-22. The petitioner contended that the impugned order was passed without a proper reply to the show cause notice. The respondent's counsel had no objection to the case being remitted back for fresh adjudication. The petitioner offered to deposit 25% of the disputed tax in cash as a condition for de novo adjudication.

Held

The Court held that the impugned order dated 29.12.2025, passed by the respondent under Section 73 of the respective GST enactments for the Financial Year 2021-22, was to be quashed. This decision was based on the petitioner's submission that the order was passed without a proper reply to the show cause notice, indicating a potential violation of the principles of natural justice. The Court accepted the petitioner's undertaking to deposit 25% of the disputed tax in cash within thirty days of receiving a copy of the order. The petitioner was also directed to file a reply to the notice preceding the assessment order, treating the impugned order as an addendum to the show cause notice. The respondent was instructed to pass fresh orders on merits and in accordance with law, after hearing the petitioner, preferably within three months. Failure to comply with these conditions would allow the respondent to proceed as if the writ petition was dismissed. The ratio decidendi is that orders passed in violation of natural justice, particularly when the authority fails to consider the assessee's response to a show cause notice, are liable to be set aside, subject to certain conditions.

Key Issues

1. Whether the impugned order passed by the respondent under Section 73 of the respective GST enactments, 2017, for the Financial Year 2021-22 is liable to be quashed for gross violation of the Principles of Natural Justice, specifically for being passed without a proper reply to the show cause notice? Petitioner's contention: The petitioner argued that the impugned order was passed without addressing their reply to the show cause notice, thereby violating the principles of natural justice. They expressed readiness to deposit 25% of the disputed tax in cash to facilitate a fresh adjudication. Respondent's contention: The counsel for the State Tax Officer had no objection to the case being remitted back to the respondent for passing a fresh order in lieu of the impugned order.