Tvl.R.D. Constructions vs. The State Tax Officer

Held

The Court decided to dispose of the writ petition by quashing the impugned assessment order dated 15.02.2025, subject to certain conditions. The Court noted that in similar circumstances, it had previously intervened to assist petitioners. The primary reasoning for quashing the order was to provide the petitioner with an opportunity to present their case, despite their initial non-compliance. The ratio decidendi is that procedural fairness and an opportunity to be heard are paramount, and High Courts can intervene in writ jurisdiction to ensure this, even if it involves setting aside an order passed due to the petitioner's default, provided certain conditions are met. The operative directions were that the petitioner must deposit 25% of the disputed tax in cash from their Electronic Cash Register within 30 days of receiving the order. Subsequently, the petitioner must file a reply to the notice in DRC 01 dated 30.11.2024, treating the impugned order as an addendum to the show cause notice. Upon compliance, the respondent is to pass fresh orders on merits and in accordance with law after hearing the petitioner, preferably within three months. Failure to comply with these conditions would allow the respondent to proceed as if the writ petition was dismissed in limine.

Facts

The petitioner, Tvl.R.D. Constructions, represented by its Proprietor N.Muthu Kumar, filed a writ petition challenging an assessment order dated 15.02.2025 passed by the respondent, the State Tax Officer, Karaikudi Assessment Circle, for the tax period 2020-21. The impugned order was preceded by notices DRC 01A dated 04.10.2024 and DRC 01 dated 30.11.2024. The petitioner admitted to not having replied to these notices or appeared for personal hearings scheduled for 26.12.2024 and 03.02.2025. The respondent argued that the petitioner's non-cooperation led to the order and suggested filing an appeal under Section 107 of the GST enactments.

Key Issues

1. Whether the impugned assessment order dated 15.02.2025, passed for the tax period 2020-21, is liable to be quashed due to procedural irregularities or lack of opportunity for the petitioner to present its case, as contemplated under the relevant provisions of the GST Act and Rules? Petitioner's contention: The petitioner argued that they have a fair case to succeed and therefore prayed for the quashing of the impugned order, implying that the order was passed without due process or consideration of their submissions. Respondent's contention: The respondent contended that the petitioner failed to cooperate by not filing a reply to the notices and not appearing for personal hearings, thus suffering the impugned order. They further submitted that the petitioner has the remedy of filing an appeal within the limitation period prescribed under Section 107 of the respective GST enactments, 2017.