M/S. Sri Karuppasamy Traders vs. The Deputy Satate Tax Officer 1

Facts

The petitioner, M/s. Sri Karuppasamy Traders, filed a writ petition challenging an assessment order dated 27.01.2025, issued by the Deputy State Tax Officer – 1, Bodinayakanur Assessment Circle, for the assessment year 2020-2021. The impugned order was preceded by a show cause notice dated 25.11.2024 and a personal hearing notice dated 27.12.2024. The petitioner did not file a reply to the show cause notice nor appeared for the personal hearing, attributing this to their accountant failing to inform them of the notices. The respondent argued that the petitioner failed to avail prescribed remedies and thus could not maintain a writ petition.

Held

The Court held that in the interest of justice, the petitioner could be granted a temporary reprieve. The impugned Assessment Order dated 27.01.2025 was quashed. The matter was remitted back to the respondent for fresh consideration, subject to the petitioner depositing 25% of the disputed tax amount within 30 days and filing a reply to the show cause notice within the same period. Upon compliance, the respondent was directed to provide a personal hearing and pass final orders on merits within two months. The Court also stipulated that if the petitioner failed to comply with any of the conditions, the respondent could proceed as if the Writ Petition stood dismissed in limine. The ratio is that procedural lapses, if explained and rectified with a partial deposit, can lead to a remittal for a fresh hearing, even if statutory remedies were not initially availed.

Key Issues

1. Whether the impugned assessment order, passed without affording the petitioner an opportunity of being heard, is liable to be quashed for violation of statutory provisions and lack of jurisdiction, particularly in light of the petitioner's explanation for non-compliance with procedural notices? The petitioner contended that the assessment order was passed without jurisdiction and in clear violation of statutory provisions, as they were not afforded a proper hearing due to their accountant's failure to relay the notices. They sought to quash the order on these grounds. The respondent argued that the petitioner, having failed to avail the remedies within the prescribed time, cannot maintain a Writ Petition. They relied on Supreme Court decisions in M/s. Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur and Others, CCE and Customs vs. Hongo India (P) Ltd., and Assistant Commissioner (CT), LTU, Kakinada and Others vs. Glaxo Smith Kline Consumer Health Care Ltd.