Tvl Shree Vegetables vs. The State Tax Officer

Facts

The petitioner, Tvl. Shree Vegetables, represented by its Proprietor C. Saravanan, filed a writ petition challenging an assessment order dated 29.12.2025 passed by the respondent, The State Tax Officer, Tenkasi Assessment Circle, under Section 73 of the TNGST Act, 2017, for the assessment year 2021-22. The respondent had issued a Show Cause Notice due to discrepancies concerning exempted/non-GST supplies. The petitioner contended that they deal only in vegetables, which are exempt, and that the respondent erroneously treated the entire transaction as taxable based on a few transactions reflected in the name of 'beedi'. The petitioner requested an opportunity to file a reply and produce supporting documents. The respondent argued that the Show Cause Notice was uploaded and alerts were sent, but the petitioner did not respond. The court noted that while a reply was filed, supporting documents were absent. The disputed amount was not explicitly stated, but the revenue identified 32 transactions totaling Rs. 11,40,000/- relating to beedi, out of a total transaction amount of Rs. 1,60,66,920/-.

Held

The Court allowed the writ petition on terms. It held that an opportunity should be granted to the petitioner to produce documents in support of their claim, considering the submission that vegetables are exempt and that only a portion of the transactions related to beedi. The Court reasoned that while normally a 25% deposit of the disputed tax amount would be imposed as a condition for granting such an opportunity, in this case, a deposit of 15% of the disputed tax amount would suffice. The impugned order dated 29.12.2025 was set aside, and the matter was remitted back to the respondent for fresh consideration. The petitioner was directed to deposit 15% of the disputed tax amount within four weeks and appear before the respondent to file a reply and produce documents, which the respondent was to consider in accordance with law. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the petitioner should be granted an opportunity to submit supporting documents and a reply to the Show Cause Notice, considering their claim that their primary business involves exempt supplies of vegetables and that only a small portion of transactions were misclassified as taxable. Petitioner's arguments: The petitioner argued that they exclusively deal in vegetables, which are exempt under GST law. They contended that the respondent erred in treating the entire turnover as taxable, attributing it to 'beedi' transactions based on only a few instances. They asserted that if granted an opportunity, they could furnish appropriate replies and documents to substantiate their claim of exempt supplies. Revenue's arguments: The respondent argued that the Show Cause Notice was duly uploaded on the portal and that the petitioner received alerts but failed to take necessary steps. They stated that the order was passed accordingly. The respondent also identified specific transactions relating to 'beedi' totaling Rs. 11,40,000/-, out of the total turnover.