Tvl.Balaji Agencies vs. The Assistant Commissioner (St)

Held

The Court quashed the impugned assessment order dated July 21, 2025, subject to the petitioner depositing 25% of the disputed tax in cash from the Electronic Cash Register within 30 days of receiving the order. The petitioner was also directed to file a reply to the show cause notice within a specified time, with the quashed order to be treated as an addendum to the show cause notice. The respondent was directed to pass a fresh order on merits after hearing the petitioner. The Court made it clear that failure to comply with these conditions would result in the writ petition being deemed dismissed, allowing the respondent to proceed as per GST enactments. The ratio decidendi is that a procedural lapse, such as non-response to a show cause notice, can be condoned by granting a fresh opportunity, provided the petitioner demonstrates willingness to comply with certain conditions, including a partial deposit of the disputed tax.

Facts

The petitioner, Tvl.Balaji Agencies, filed a writ petition before the Madurai Bench of the Madras High Court challenging an assessment order dated July 21, 2025, passed by the Assistant Commissioner (ST), Palani-II Assessment Circle. This order was for the assessment year 2020-2021. The impugned order was issued after a show cause notice in Form GST DRC 01 dated July 5, 2024, to which the petitioner failed to respond. The petitioner sought a fresh opportunity to present their case and was willing to deposit 25% of the disputed tax amount.

Key Issues

1. Whether the petitioner should be granted a fresh opportunity to reply to the show cause notice and present their case, considering their failure to respond initially? (Question of law and fact, turning on principles of natural justice and procedural fairness). Petitioner's contention: The petitioner argued that they should be granted a fresh opportunity to explain their case concerning the demand confirmed by the impugned order. They also expressed willingness to deposit 25% of the disputed tax amount. Revenue's contention: The respondent, represented by the Government Advocate, took notice of the petition. No specific arguments were recorded from the revenue's side regarding the merits of the petitioner's request for a fresh opportunity, beyond acknowledging the petition.