Idhayam G Family Store vs. The State Tax Officer /The Commercial Tax Officer

Facts

The petitioner, M/s.Idhayam-G Family Store, represented by its partner R.Sathyam, filed a writ petition challenging an ex-parte order dated 24.02.2025 passed by the respondent, the State Tax Officer/Commercial Tax Officer, Virudhunagar I Assessment Circle. The order pertains to the financial year 2020-21. The petitioner contended that they were unaware of the proceedings because the notice was served only through an online portal. The respondent, through the learned Government Advocate, suggested a course of action similar to other cases where relief was granted upon deposit of a portion of the disputed tax amount.

Held

The Court decided to quash the impugned ex-parte order dated 24.02.2025, subject to certain conditions. The reasoning was based on the petitioner's assertion of not being aware of the online notice and the respondent's willingness to allow the petitioner to participate in the proceedings. The Court directed the petitioner to deposit 25% of the disputed tax amount through the electronic cash ledger within thirty days of receiving a copy of the order. Upon compliance, the attachment on the petitioner's Input Tax Credit (ITC) account would be lifted. The petitioner would then be required to reply to the show cause notice within thirty days thereafter. The respondent was directed to provide an opportunity for a personal hearing and pass a final order within two months of receiving the petitioner's reply. The Court also stipulated that if the petitioner failed to comply with the deposit and reply timelines, the benefit of this order would be withdrawn, and the original impugned order could be enforced. No specific section of the GST Act was explicitly discussed in relation to the quashing of the order, but the procedural fairness aspect implicitly relates to due process under tax laws.

Key Issues

1. Whether the ex-parte order passed by the respondent is liable to be quashed on the ground that the petitioner was not aware of the online notice served through the portal, thereby violating principles of natural justice? (Question of law and fact, potentially touching upon procedural fairness under GST law). Petitioner's argument: The petitioner argued that the ex-parte order was passed without their knowledge due to the online-only service of notice, preventing them from participating in the proceedings and presenting their case. They sought to quash the impugned order. Respondent's argument: The respondent did not contest the petitioner's claim of unawareness but proposed a settlement mechanism. They submitted that in similar matters, relief was granted by directing the assessee to deposit 25% of the disputed tax amount.