M/S Sri Lakshmi Ayyangar Cake Shop vs. The Deputy Commercial Tax Officer / State Tax Officer

Facts

The petitioner, M/s Sri Lakshmi Ayyangar Cake Shop, filed a writ petition challenging an order dated 23.12.2025 passed by the Deputy Commercial Tax Officer/State Tax Officer. This order was issued for the financial year 2021-2022, following a Show Cause Notice dated 27.09.2025. The petitioner had been called for a personal hearing but did not avail it. The writ petition was filed on 24.09.2026, after the limitation period for filing an appeal under Section 107 of the GST enactments had expired. The petitioner contended that their business of selling cakes is exempted under the GST enactments and expressed willingness to pre-deposit 10% of the disputed tax demand.

Held

The Court quashed the impugned order dated 23.12.2025. The reasoning was based on the petitioner's submission that their business is exempted and their willingness to pre-deposit 10% of the disputed tax. The Court found this concession acceptable for a de novo adjudication. The case was remitted back to the respondent for passing a fresh order. The ratio decidendi is that in cases where a petitioner claims exemption, has not fully availed the opportunity of hearing, and is willing to pre-deposit a portion of the demand, the High Court may, in its writ jurisdiction, quash the order and remand the matter for fresh consideration, subject to compliance with certain conditions. The operative direction is to quash the impugned order and remit the case back to the respondent. The petitioner is directed to deposit 10% of the disputed tax in cash within 30 days and file a reply to the Show Cause Notice with supporting documents. The respondent shall pass a fresh order on merits within three months of compliance. Failure to comply will allow the respondent to recover the tax as if the writ petition was dismissed.

Key Issues

1. Whether the impugned order dated 23.12.2025, passed by the respondent, is liable to be quashed on the grounds of denial of a full and effective opportunity of hearing and submission of documents to the petitioner? 2. Whether the petitioner is entitled to a de novo adjudication of their case, considering their claim of exemption for their business and willingness to pre-deposit a portion of the disputed tax? Petitioner's arguments: The petitioner argued that their business of selling cakes is exempted under the GST enactments. They further submitted that they were not given a full and effective opportunity to be heard and submit documents. To facilitate a fresh adjudication, the petitioner agreed to pre-deposit 10% of the disputed tax demand. No specific authorities or precedents were cited by the petitioner in the provided text. Revenue's arguments: The learned Special Government Pleader for the respondent submitted that the petitioner had not produced any documents to substantiate their case. The respondent did not present any counter-arguments regarding the petitioner's claim of exemption or the opportunity of hearing.