Chinnakovilankulam Primary Agriculture Co-Op Credit Society vs. The Commercial Tax Officer

Facts

The petitioner, Chinnakovilankulam Primary Agriculture Co-op Credit Society, filed a writ petition challenging an order dated 16.12.2025 issued by the Commercial Tax Officer, Sankarankovil Assessment Circle. This order, in Form GST DRC-07, pertains to the tax period April 2021 - March 2022. The petitioner claims that a sum of Rs. 2,51,406/- each towards CGST and SGST was recovered pursuant to the impugned order, representing approximately 71% of the total tax demand. The petitioner's primary ground for challenge is a breach of the principles of natural justice. The respondent, the Commercial Tax Officer, accepted notice through the Special Government Pleader.

Held

The Court, while acknowledging the petitioner's contention regarding the breach of principles of natural justice, did not definitively rule on the merits of the tax proposal. Instead, the Court ordered that the impugned order be set aside to provide the petitioner with an opportunity to contest the tax proposal on its merits. This decision was contingent upon the verification and confirmation that approximately Rs. 2,51,406/- each was indeed recovered for CGST and SGST pursuant to the impugned order. If confirmed, the respondent authority is directed to issue a fresh order after affording a reasonable opportunity to the petitioner, within five months from the date of confirming the recovery. Concurrently, upon confirmation of the recovery, the bank attachment related to the impugned order shall be raised. The Court expressly left undecided the merits of the tax demand itself, focusing on procedural fairness.

Key Issues

1. Whether the impugned order dated 16.12.2025, issued by the Commercial Tax Officer, is liable to be quashed on the ground of breach of the principles of natural justice, as contended by the petitioner? The petitioner argued that the principles of natural justice were violated, leading to the impugned order being unsustainable. The petitioner also highlighted that a significant portion of the tax demand, approximately Rs. 2,51,406/- each for CGST and SGST, had already been recovered based on the impugned order, as evidenced by the Electronic Liability Ledger. The respondent, represented by the Special Government Pleader, did not present a detailed argument but accepted notice and agreed to a course of action based on verification of the recovery.