Tvl.I.Vetrivel vs. State Tax Officer
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The petitioner, I. Vetrivel Contractor, filed a Writ Petition seeking to quash an order-in-original (Form GST DRC-07) dated 27.02.2025, issued by the respondent, the State Tax Officer, Madurai Rural (West) Assessment Circle. This order was passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017, for the financial year 2020-21. The petitioner argued that the impugned notice was a recurring show cause notice for the assessment year 2021-2022. He contended that for a subsequent year (2022-2023), a show cause notice was issued, to which he submitted a reply, and after enquiry, a substantial portion of the tax was dropped. He believed the same principle should apply to the current assessment year. The petitioner admitted to failing to submit his reply and documents for the impugned order, leading to a significant tax liability.
Held
The Court set aside the assessment order. The reasoning was based on the petitioner's submission that for a subsequent year (2022-2023), after a detailed reply and enquiry, a substantial portion of the tax demand was dropped. The Court found merit in the petitioner's plea that this principle should also be applicable to the current assessment year (2021-2022), despite the petitioner's failure to submit a reply for this period. The Court acknowledged the petitioner's admission of failure to submit a reply and documents, which resulted in a significant tax liability. However, it inclined to set aside the assessment. The operative directions included setting aside the assessment order, directing the petitioner to submit a detailed reply, conducting an enquiry within four months of receiving the order, and granting the petitioner a personal hearing without fail. The ratio decidendi is that where a similar situation in a subsequent period led to a favourable outcome for the assessee after enquiry, the assessment for the current period should also be re-examined, allowing the assessee an opportunity to present their case.
Key Issues
1. Whether the principles applied in dropping a substantial portion of tax for the assessment year 2022-2023, after the petitioner submitted a reply and an enquiry was conducted, should be extended to the assessment year 2021-2022, despite the petitioner's failure to submit a reply for the latter. Petitioner's arguments: The petitioner contended that since a substantial portion of tax was dropped for the subsequent year (2022-2023) after a detailed reply and enquiry, the same relief should be granted for the current assessment year (2021-2022). He argued that the respondent's contention for demanding interim payment of tax could not be accepted, as subsequent proceedings were dropped, implying no demand should exist. Respondent's arguments: The judgment does not record any specific arguments made by the respondent. It only notes the petitioner's contention that the respondent's argument for interim direction for payment of tax cannot be accepted.
Sections Cited
Section 73
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Before: and
The present Writ Petition has been filed for the issuance of a Writ of Certiorari, to quash the order of the respondent bearing Ref.No.ZD330225290958Z, dated 27.02.2025 issued in Form GST DRC-07 by the respondent under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017 and all proceedings in consequence thereof including but not limited to the proceedings contained in the Annexure Document for Form DRC-07, bearing ARN No.AD331124005558E/2020-21, dated 27.02.2025, for financial year 2020-21. 2.The learned Counsel appearing for the petitioner submitted that is a recurring show cause notice for the assessment year 2021-2022. For the subsequent year 2022-2023, show cause notice was issued and the petitioner has submitted a detailed reply. After enquiry, the respondent has dropped the substantial portion of the tax. Therefore, the same is also applicable to the present assessment year 2021-2022. Unfortunately, the petitioner has failed to submit his reply and the documents. Therefore, the petitioner is suffering with huge tax, interest and liability. 3.The contention of the respondent cannot be accepted for any interim direction for payment of tax. There cannot be any demand, since the 2/4 https://www.mhc.tn.gov.in/judis subsequent proceedings are dropped. 4.Therefore, this Court is inclined to set aside the assessment. Accordingly, the assessment order is set aside. The petitioner is directed to submit a detailed reply. Thereafter, an enquiry shall be conducted and completed within a period of four months from the date of receipt of a copy of this order. The petitioner is permitted to appear in person and a personal hearing shall be granted to the petitioner without fail. 5.With the above observations, this Writ Petition is allowed. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed. 06.06.2025 NCC : Yes / No Index : Yes / No Internet : Yes Tmg To: State Tax Officer, Madurai Rural (West) Assessment Circle, Commercial Taxes Department, C.T.Complex, 1st Floor, Dr.Thangaraja Road, Madurai -625 020. 3/4 https://www.mhc.tn.gov.in/judis S.SRIMATHY
, J.
Tmg ORDER MADE IN DATED : 06.06.2025 4/4 https://www.mhc.tn.gov.in/judis
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.