Tvl. Royal Paints vs. The Assistant Commissioner (St)

Held

The Court quashed the impugned order dated 26.02.2025 and remitted the case back to the respondent for fresh consideration. The decision was based on the consistent view of the Court in similar circumstances. The quashing was made conditional upon the petitioner depositing 25% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving the order. The petitioner was also directed to file a reply to the DRC-01 notice dated 25.11.2024, treating the impugned order as an addendum to the Show Cause Notice. The respondent was directed to pass fresh orders on merits and in accordance with law, preferably within three months thereafter, after hearing the petitioner. The Court also stipulated that if the petitioner failed to comply with any of the conditions, the respondent was at liberty to proceed as if the Writ Petition was dismissed in limine. No issue was expressly left undecided.

Facts

The petitioner, Tvl. Royal Paints, represented by its Partner M. Nallathambi, filed a writ petition challenging an order dated 26.02.2025 passed by the respondent, the Assistant Commissioner (ST), Madurai. This order confirmed a tax demand for the period 2020-21. The impugned order followed notices in DRC-01 dated 25.11.2024 and personal hearing notices dated 31.12.2024 and 24.01.2025. The petitioner acknowledged the availability of statutory remedies like appeal under Section 107 or rectification under Section 161 but submitted that they failed to notice the impugned order passed pursuant to the DRC-01 notice. The petitioner was willing to deposit 25% of the disputed tax.

Key Issues

1. Whether the impugned order dated 26.02.2025, which confirmed a tax demand for the period 2020-21, is liable to be quashed for alleged violation of the Principles of Natural Justice, as argued by the petitioner? The petitioner contended that they failed to notice the impugned order passed pursuant to the notice in DRC-01 dated 25.11.2024, implying a lack of proper opportunity to respond. They expressed willingness to deposit 25% of the disputed tax as a condition for quashing the order. The respondent, represented by the learned Government Advocate, argued that the Writ Petition is liable to be dismissed.