Tvl.Uthirapathi Contractor vs. The State Tax Officer (Inspection I)

Facts

The petitioner, Tvl. Uthirapathi Contractor, represented by its Proprietor P. Uthirapathi, filed a writ petition challenging an order passed by the Respondent, the State Tax Officer (Inspection-I), Thiruvarur Division. The impugned order, dated 05.09.2024, pertains to the tax period 2022-23. The petitioner sought to quash this order on grounds of illegality and gross violation of the principles of natural justice, specifically requesting a fresh assessment after being provided an opportunity for a personal hearing. The Respondent's counsel submitted that the petitioner had already paid the tax amount pursuant to a DRC-01 notice, and the current show cause notice was only for interest and penalty.

Held

The Court held that the impugned assessment order is set aside. The reasoning provided by the Court is that while the Respondent indicated that the tax amount was paid pursuant to a DRC-01 notice and the current notice was only for interest and penalty, the issue was covered by a previous order of the same Court in W.P.(MD) No.26481 of 2024 etc., batch dated 06.01.2025. The Court directed the petitioner to submit their reply within two weeks of receiving the order. Subsequently, the Respondent is to provide an opportunity of hearing to the petitioner and pass orders on merits and in accordance with law. Any bank attachment made in relation to this matter is also to be raised. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the impugned order dated 05.09.2024, passed by the Respondent for the tax period 2022-23, is illegal and in gross violation of the principles of natural justice, warranting its quashment? Petitioner's Contention: The petitioner argued that the impugned order was passed in gross violation of the principles of natural justice, as they were not provided with an adequate opportunity for a personal hearing before the assessment was finalized. They sought a direction for a fresh assessment after providing such an opportunity. Respondent's Contention: The Respondent's counsel submitted that the petitioner had paid the tax amount pursuant to a DRC-01 notice, and the present show cause notice was issued solely for the collection of interest and penalty. The Respondent did not explicitly argue against the petitioner's claim of violation of natural justice but indicated that the tax demand had been settled.