Hotel North Gate PVT LTD vs. The State Tax Officer

Facts

The petitioner, Hotel North Gate Pvt Ltd, filed a writ petition before the Madurai Bench of the Madras High Court challenging an order dated 24.01.2025 passed by the respondent, the State Tax Officer. This order was issued pursuant to a Show Cause Notice dated 05.08.2024, to which the petitioner had replied on 04.09.2024. The petitioner contended that the impugned order confirmed a demand of Rs.1,05,524/-, despite the petitioner having paid the disputed tax of Rs.5,59,641/- each under the TNGST and CGST Acts, 2017. The respondent argued that the petitioner failed to furnish documents to substantiate their claim. The petitioner had not filed an appeal before the Appellate Commissioner.

Held

The Court held that the impugned order dated 24.01.2025 was to be quashed and the case remitted back to the respondent for fresh consideration. The Court noted that the petitioner had paid approximately 72% of the disputed tax, and this payment had not been considered in the impugned order. The Court found this situation to be similar to other cases where it had remitted matters back to the respondent for fresh orders, subject to a partial payment of the disputed tax. The Court's reasoning was that the substantial payment made by the petitioner warranted a re-examination of the case. The operative direction was to quash the impugned order and remit the matter to the respondent. The petitioner was directed to furnish all substantiating documents and a fresh reply within 30 days. The respondent was directed to pass fresh orders on merits and in accordance with law within three months, after hearing the petitioner. The issue of jurisdiction was implicitly addressed by remitting the matter for fresh consideration on merits.

Key Issues

1. Whether the impugned order dated 24.01.2025, passed by the respondent, is without jurisdiction and in clear violation of statutory provisions, particularly concerning the non-consideration of the tax paid by the petitioner? Petitioner's Contentions: The petitioner argued that the impugned order was passed without jurisdiction and in violation of statutory provisions because the respondent failed to consider the substantial amount of disputed tax already paid by the petitioner. They highlighted that approximately 72% of the disputed tax had been paid, yet the demand was confirmed without accounting for this payment. The petitioner relied on the principle that tax authorities should consider payments made by the assessee before confirming demands. Respondent's Contentions: The respondent contended that the petitioner was called upon to furnish documents to substantiate their position, but failed to do so. Consequently, the impugned order was passed based on the available information.