Tvl. Fancy Agency vs. The Deputy State Tax Officer - I

Held

The Court decided to grant relief in both writ petitions, subject to certain conditions. For W.P.(MD) No.35321 of 2025, the Court held that in the interest of justice, liberty should be granted to the petitioner to file an appeal. This was based on the fact that no physical copy of the order was issued, it was uploaded on the portal, and 50% of the tax had already been recovered. The petitioner was directed to deposit an additional 5% of the disputed tax amount, over and above the statutory 10% pre-deposit, within two weeks of receiving the order. For W.P.(MD) No.35322 of 2025, the Court found the petitioner's reason for not filing a reply – missing the second show-cause notice due to confusion caused by two notices for the same year – to be genuine and not an attempt to circumvent the process. The Court held that the petitioner was entitled to a fair opportunity. Consequently, the impugned order dated 29.07.2025 was set aside, subject to the petitioner depositing 25% of the disputed tax within three weeks. Upon deposit, the petitioner was granted two weeks to file a reply, after which the respondent was directed to provide a hearing and pass appropriate orders. The ratio is that procedural irregularities and genuine mistakes leading to non-compliance should be condoned by granting opportunities for fair adjudication, especially when partial compliance or undertakings for further compliance are made.

Facts

The petitioner, Tvl. Fancy Agency, filed two writ petitions challenging assessment orders dated April 9, 2025, and July 29, 2025, passed by the Deputy State Tax Officer-I, Virudhunagar, for the Assessment Year 2021-2022. The petitioner contended that for the same assessment year, two separate show-cause notices were issued, leading to the impugned orders. In the first writ petition concerning the April 9, 2025 order, the petitioner stated that 50% of the SGST amount had been paid and sought to file an appeal against the CGST amount, requesting a pre-deposit of 10% of the disputed tax. In the second writ petition concerning the July 29, 2025 order, the petitioner admitted to inadvertently missing the second show-cause notice due to confusion caused by two notices for the same year and undertook to deposit 25% of the disputed tax.

Key Issues

1. Whether the petitioner in W.P.(MD) No.35321 of 2025 should be granted liberty to file an appeal against the assessment order dated 09.04.2025, subject to certain conditions, considering the non-receipt of a physical copy and partial payment of tax? 2. Whether the ex-parte assessment order dated 29.07.2025 in W.P.(MD) No.35322 of 2025 should be set aside and the petitioner granted an opportunity to file a reply, given the petitioner's submission of missing the second show-cause notice due to confusion? Petitioner's arguments: In W.P.(MD) No.35321 of 2025, the petitioner argued that they could not file an appeal in time as only a web portal upload was available and no physical copy was communicated. They offered to pay an additional 5% of the disputed tax over the statutory 10% pre-deposit. In W.P.(MD) No.35322 of 2025, the petitioner attributed the failure to file a reply to inadvertently missing the second show-cause notice due to confusion arising from two notices for the same assessment year and undertook to deposit 25% of the disputed tax. Revenue's arguments: The respondent submitted that the Court may consider the petitioner's request if the disputed tax is deposited as undertaken.