Tvl. Gomathi vs. The Deputy State Tax Officer - 1 / The Deputy Commercial Tax Officer

Facts

The petitioner, Tvl. Gomathi, challenged an assessment order dated 29.12.2025 passed by the Deputy State Tax Officer-1, Palayamkottai Assessment Circle. The petitioner's application for rectification of this order, filed on 27.03.2026, was rejected on 12.05.2026. The petitioner contended that they were entitled to an exemption from GST as per Notification No.17/2020-21-Central Tax (Rate) dated 18.11.2021, which exempts services by way of transportation of passengers by various motor vehicles. The impugned order was passed due to the petitioner's failure to substantiate their claim for exemption with necessary documents. The petitioner later offered to deposit 25% of the disputed tax as a condition for de novo adjudication to prove their eligibility for the exemption.

Held

The Court held that the impugned assessment order dated 29.12.2025 should be set aside and the case remitted to the respondent for fresh consideration. The Court reasoned that while the initial assessment order was passed due to the petitioner's failure to provide necessary documents to substantiate their claim for exemption under Notification No.17/2020-21/CT(Rate) dated 18.11.2021, the petitioner's subsequent undertaking to deposit 25% of the disputed tax, coupled with their willingness to file a reply and necessary documents, warranted a fresh opportunity. The Court found no prejudice to the revenue in granting this opportunity. The ratio decidendi is that when a petitioner offers to deposit a portion of the disputed tax and demonstrates a willingness to properly substantiate their claim for exemption, and no prejudice is caused to the revenue, a High Court exercising writ jurisdiction may remit the matter for de novo adjudication to ensure a just outcome. The operative direction is to quash the impugned order, subject to the petitioner depositing 25% of the disputed tax within thirty days and filing a reply with supporting documents. The respondent is then to pass fresh orders on merits within three months after hearing the petitioner.

Key Issues

1. Whether the assessment order dated 29.12.2025, passed by the Deputy State Tax Officer-1, is liable to be quashed and the proceedings remitted for fresh adjudication, considering the petitioner's claim for exemption under Notification No.17/2020-21-Central Tax (Rate) dated 18.11.2021 and their subsequent offer to deposit 25% of the disputed tax. Petitioner's argument: The petitioner argued that they are entitled to the exemption under the specified notification and that the assessment order was passed without proper consideration of their eligibility. They further submitted that they are willing to deposit 25% of the disputed tax to allow for a de novo adjudication where they can properly substantiate their claim. They relied on the principle that justice should be done and that an opportunity to present their case with supporting documents should be granted. Respondent's argument: The respondent, represented by the State of Tamil Nadu, did not explicitly record any arguments against the petitioner's plea for a fresh adjudication, particularly in light of the petitioner's undertaking to deposit a portion of the disputed tax. The respondent's primary stance, as reflected in the rejection of the rectification application, was that there was no scope for rectifying the original assessment order.