M/S.Indroyal Furniture Company Private LTD vs. The State Tax Officer

Facts

The petitioner, M/s. Indroyal Furniture Company Private Ltd., filed a writ petition challenging an order passed by the State Tax Officer under Section 79(1)(c) of the Tamil Nadu State Goods and Service Act, 2017, and a consequential order attaching its bank account. The petitioner had initially faced an order under Section 74 of the Act. Subsequently, it filed an application for rectification under Section 161 of the Act, which was rejected on January 7, 2026. The petitioner argued that the impugned order dated December 18, 2025, which attached its bank account, was passed immediately after the rejection of its rectification application, despite the availability of an appeal remedy under Section 107 of the Act. The revenue contended that the petitioner filed the rectification application to delay proceedings and had not filed an appeal against the Section 74 order.

Held

The Court held that the petitioner, having suffered an order under Section 74 of the Act, had a statutory appeal remedy under Section 107 of the Act. While the petitioner invoked Section 161 for rectification, which was rejected on January 7, 2026, the Court noted that the time limit for filing an appeal is three months, which can be condoned by the Authority for a further period of one month. Therefore, the period of limitation for filing the appeal should be reckoned from January 7, 2026. The Court directed the petitioner to file a statutory appeal within two weeks from the date of receipt of the order. The impugned order dated December 18, 2025, was directed to be kept under abeyance for three weeks. The Court also noted that the statute prescribes a deposit of 10% of the disputed tax amount as a condition for entertaining the appeal. The writ petition was disposed of with these directions.

Key Issues

1. Whether the petitioner, having had its rectification application under Section 161 of the Tamil Nadu State Goods and Service Act, 2017 rejected, can directly approach the High Court instead of filing a statutory appeal under Section 107 of the Act? 2. Whether the attachment of the petitioner's bank account under Section 79(1)(c) of the Act, in light of the pending appeal remedy and the recent rejection of a rectification application, is justified? Petitioner's arguments: The petitioner contended that the impugned order attaching its bank account was illegal as it was passed immediately after the rejection of its rectification application, and it should have been allowed to pursue its statutory appeal. The petitioner also highlighted that the time limit for filing an appeal is three months, and the rejection of the rectification application on January 7, 2026, should be the starting point for calculating this period. Revenue's arguments: The revenue argued that the petitioner filed the Section 161 application to delay the process and had not filed an appeal against the original order passed under Section 74 of the Act. The revenue also stated that the period of limitation for filing an appeal had already expired, justifying the recovery order passed under Section 78 of the Act.