Tvl. Sarva Varshini vs. The Commercial Tax Officer / Proper Officer

Facts

The petitioner, Tvl. Sarva Varshini, represented by its Proprietor Muthukumaran, filed a writ petition challenging an assessment order dated 26.02.2025, passed by the respondent, the Commercial Tax Officer/Proper Officer. This order was issued in Form GST DRC-07 for the tax period 2020-2021. The assessment order followed a show cause notice dated 25.11.2024. The petitioner failed to file a reply to the show cause notice within the stipulated time, leading to the passing of the impugned assessment order. The petitioner also did not file an appeal under Section 107 or seek rectification under Section 161 of the respective GST enactments.

Held

The Court decided not to entertain the writ petition on merits due to the petitioner's failure to exhaust statutory remedies. However, balancing the interests of the assessee and the revenue, the Court directed the petitioner to pay 25% of the disputed tax through the electronic cash ledger within thirty days. Subject to this condition, the impugned assessment order was quashed, and the case was remitted back to the respondent for fresh assessment proceedings within three months. The petitioner was also directed to file a detailed reply to the show cause notice, treating the quashed assessment order as an addendum, along with the deposit. If the petitioner fails to comply, the respondent is at liberty to proceed as if the writ petition was dismissed. The Court emphasized that the petitioner must be heard before any fresh order is passed.

Key Issues

1. Whether the Court should entertain a writ petition challenging an assessment order when the petitioner has alternative statutory remedies of appeal under Section 107 and rectification under Section 161 of the GST enactments, which were not availed. Petitioner's contention: The petitioner implicitly argues that the assessment order is illegal and devoid of merits, warranting intervention by the High Court under Article 226 of the Constitution. The petitioner seeks to quash the order and have the assessment redone. Respondent's contention: The respondent, by virtue of the assessment order being passed, implicitly relies on the statutory framework and the petitioner's failure to follow the prescribed procedures. The respondent would likely argue that the petitioner should have exhausted the statutory remedies available before approaching the High Court.