M/S Hello Fashion World vs. The Deputy State Tax Officer -1

Held

The Court held that while the petitioner had failed to file a reply to the show cause notices and had not availed statutory remedies, a balance needed to be struck between the assessee's and the revenue's interests. Consequently, the Court directed the petitioner to pay 25% of the disputed tax for each assessment year within thirty days. Subject to this condition, the impugned orders were quashed, and the case was remitted back to the respondent for passing fresh orders within three months. The petitioner was also directed to file a detailed reply to the show cause notices, treating the quashed orders as addenda, along with the pre-deposit. Failure to comply would result in the writ petitions being dismissed in limine, allowing the respondent to proceed as if the petitions were dismissed. Any amount already recovered would be adjusted towards the pre-deposit. The petitioner would be heard before any fresh order is passed.

Facts

The petitioner, M/s. Hello Fashion World, filed two writ petitions challenging assessment orders in Form DRC-07 issued by the Deputy State Tax Officer-1, Tiruverumbur Assessment Circle. The first order, dated 29.08.2024, pertains to the assessment year 2019-2020, and the second, dated 20.02.2025, relates to the assessment year 2020-2021. The petitioner argued that these orders were passed without jurisdiction and in violation of statutory provisions. The impugned orders were preceded by show cause notices in Form GST DRC-01, to which the petitioner failed to file a reply within the stipulated time. The petitioner also did not file an appeal under Section 107 or seek rectification under Section 161 of the respective GST Enactments.

Key Issues

1. Whether the impugned assessment orders, passed in Form DRC-07, are without jurisdiction and in clear violation of statutory provisions, as contended by the petitioner? The petitioner argued that the respondent authority lacked jurisdiction to pass the impugned orders. The respondent, the State, did not explicitly record arguments but implicitly defended the orders by seeking their upholding. The court noted the petitioner's failure to file a reply to the show cause notices and to avail statutory remedies like appeal or rectification.