Shri Kalatthi Ayyanar Collective Farm Producer Co LTD vs. The State Tax Officer

Facts

The petitioner, Shri Kalatthi Ayyanar Collective Farm Producer Co., Ltd., filed a writ petition seeking to quash the order in Form DRC-07 dated 28.12.2025 passed by the 1st respondent (State Tax Officer) and the consequential order in Form GST APL 02 dated 12.06.2026 passed by the 2nd respondent (Deputy Commissioner (GST Appeals)). The petitioner contended that they could not avail the opportunity to respond to the show cause notice due to personal circumstances and possessed valid defenses and documents. The respondents argued that the petitioner did not avail the opportunity when the show cause notice was issued, and the appeal was filed beyond the condonable limit, leading to its rejection.

Held

The Court held that while the appellate authority was justified in rejecting the appeal filed beyond the condonable limit, considering the petitioner's explanation for not availing the opportunity and the nature of discrepancies, an opportunity should be granted to the assessee. The Court found merit in the petitioner's plea for equitable grounds. Although typically 25% of the disputed tax is ordered for deposit, the Court, noting that the petitioner deals with exempted goods, did not impose this condition. Consequently, the impugned orders were set aside, and the matter was remanded back to the respondent assessing officer for reconsideration. The petitioner was directed to appear and submit their reply and documents, and the respondent was to consider the matter afresh. Any bank account attachment made pursuant to the impugned order was also ordered to be raised.

Key Issues

1. Whether the impugned orders passed by the 1st and 2nd respondents are liable to be quashed as cryptic, non-speaking, illegal, arbitrary, and without jurisdiction? (Question of law and fact, turning on principles of natural justice and procedural fairness). Petitioner's arguments: The petitioner argued that they were prevented from availing the opportunity to present their case before the assessing officer due to personal circumstances. They claimed to have a valid defense and relevant documents that could have convinced the assessing authority. They sought to quash the orders on grounds of illegality and arbitrariness. Respondents' arguments: The respondents contended that the petitioner failed to avail the opportunity when the show cause notice was issued. They further argued that the appeal filed by the petitioner was beyond the condonable period and therefore rightly rejected by the appellate authority.