Tvl. Saravana Traders vs. The State Tax Officer

Facts

The petitioner, Tvl. Saravana Traders, filed two writ petitions before the Madurai Bench of the Madras High Court challenging orders passed by the State Tax Officer. In W.P.(MD)No.14390 of 2024, the impugned order dated May 11, 2023, confirmed a demand of Rs. 14,46,587, of which Rs. 1,92,429 was recovered. In W.P.(MD)No.14391 of 2024, the impugned order dated April 28, 2023, confirmed a tax demand of Rs. 1,30,288.06, with no amount paid. The petitioner admitted to failing to notice the notices preceding the orders and consequently did not file replies. The respondent argued that the petitions were time-barred due to latches and the appellate remedy was also time-barred.

Held

The Court decided to set aside the impugned orders and remit the cases back to the respondent for fresh orders. The Court acknowledged the petitioner's failure to respond to notices and the respondent's contention regarding the petitions being time-barred. However, considering that the petitioner is an ongoing concern and to provide an opportunity for participation in the proceedings, the Court directed the petitioner to deposit 10% of the disputed tax in W.P.(MD)No.14391 of 2024 within 30 days. Upon compliance, the impugned orders would stand quashed and be treated as addendums to the show cause notices. The petitioner would then have 30 days to file a reply, after which the respondent must pass fresh orders on merits after providing a personal hearing, preferably within two months. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the writ petitions are maintainable given the delay and latches, considering the respondent's argument that the appellate remedy under Section 107 of the GST Enactments is also time-barred, as per the Supreme Court decisions in Assistant Commissioner (CT) LTU, Kakinada vs. Glaxo Smith Kline Consumer Health Care Limited and Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur? Petitioner's Contention: The petitioner sought to quash the impugned orders for illegality and violation of natural justice, requesting a fresh assessment with an opportunity for a personal hearing. The petitioner was willing to deposit 10% of the disputed tax in W.P.(MD)No.14391 of 2024. Respondent's Contention: The respondent argued that the writ petitions were hopelessly time-barred and liable to be dismissed due to latches, citing Supreme Court precedents.