M/S Sri Kamatchi Agencies vs. The Deputy Commissioner (Appeal)

Facts

The petitioner, M/s. Sri Kamatchi Agencies, filed a writ petition before the Madurai Bench of the Madras High Court challenging an order dated 24.12.2025 passed by the second respondent, the Assistant Commissioner (Deputy State Tax Officer - 2), GST Office, Theni. The petitioner contended that the order was issued in breach of the principles of natural justice, specifically without providing a hearing. The petitioner also highlighted that two previous proposals concerning the same issue had been dropped. As a condition for remand, the petitioner agreed to remit 25% of the tax demand under the impugned order, with credit for approximately Rs. 30,000/- already recovered. The third respondent is the Branch Manager of The Karur Vaysya Bank.

Held

The Court held that the impugned order dated 24.12.2025 was liable to be set aside due to a breach of the principles of natural justice, as the petitioner was not afforded a proper hearing. The Court accepted the petitioner's submission to remit 25% of the tax demand under the impugned order, subject to verification and confirmation of the recovery of Rs. 30,000/- already made, and further remittance of the additional amount within 30 days. Upon fulfillment of this condition, the impugned order was set aside to allow the petitioner to contest the matter on merits. The Court directed the second respondent to issue a fresh order within five months from the date of remittance, after providing a reasonable opportunity to the petitioner. The bank attachment related to the impugned order was ordered to be raised, subject to the fulfillment of the conditions. No issue was expressly left undecided.

Key Issues

1. Whether the impugned order dated 24.12.2025, passed by the Assistant Commissioner, is liable to be quashed on the ground of breach of principles of natural justice, specifically the lack of a hearing for the petitioner? Petitioner's Arguments: The petitioner argued that the impugned order was passed without affording them an opportunity to be heard, thereby violating the fundamental principles of natural justice. They also pointed out that prior proposals on the same matter had been dropped, suggesting a potential inconsistency or lack of proper consideration. The petitioner sought to quash the order and requested a fresh enquiry. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue (R1 & R2) in response to the petitioner's contentions. The proceedings were conducted based on the petitioner's submission and an endorsement made by them.