Tvl. Aj Flour Mill vs. The State Tax Officer / Commercial Tax Officer

Facts

The petitioner, Tvl. AJ Flour Mill, represented by its Proprietor S. Subbiah Arun Pandian, filed a writ petition before the Madurai Bench of the Madras High Court challenging an assessment order and a summary order passed by the respondent, the State Tax Officer/Commercial Tax Officer, Madurai Rural (East) Assessment Circle. The impugned orders pertained to the assessment year 2021-22. The assessment was preceded by a show cause notice dated 26.09.2025, requiring the petitioner to file objections within 30 days. Despite reminders and notices for personal hearings, the petitioner failed to file a reply or appear. Consequently, the respondent passed the impugned order. The petitioner, during the hearing, expressed willingness to pre-deposit 25% of the disputed tax.

Held

The Court quashed the impugned assessment order and summary order dated 24.12.2025. The case was remitted back to the respondent for a fresh adjudication, subject to the petitioner depositing 25% of the disputed tax in cash from their electronic cash ledger within thirty days of receiving a copy of the order. The petitioner was also directed to file a reply to the show cause notice dated 26.09.2025, along with supporting documents, within the same period, treating the impugned order as an addendum to the show cause notice. If these conditions were met, the respondent was to pass a final order on merits expeditiously, preferably within three months of the reply and pre-deposit. The attachment of the petitioner's bank account, if any, would stand vacated upon compliance. The Court clarified that the bank attachment would be lifted only if the 25% deposit was made and the petitioner had no other arrears for different tax periods. If the petitioner failed to comply, the respondent could proceed to recover the tax as if the writ petition was dismissed. The respondent was also mandated to issue due notice before passing any further order. The issue of the validity of the original assessment order was not decided on merits but was set aside based on the petitioner's undertaking.

Key Issues

1. Whether the impugned assessment order and summary order for the assessment year 2021-22 are illegal and liable to be quashed, considering the petitioner's failure to respond to the show cause notice and attend personal hearings? Petitioner's Contention: The petitioner argued that they are willing to pre-deposit 25% of the disputed tax as a condition for de novo adjudication. They have made an endorsement in the court bundle consenting to this payment. Respondent's Contention: The respondent, represented by the learned counsel for the State of Tamil Nadu, did not explicitly record any arguments against the petitioner's request for a fresh adjudication, having consented to the disposal of the writ petition at the admission stage.