Tvl Sri Murugan Rice Mill vs. The Commissioner Of Commercial Taxes

Held

The Court quashed the impugned assessment order dated 17.02.2025 and remitted the case back to the second respondent (Assistant Commissioner (ST)) for a fresh decision on merits. The Court's decision was based on the petitioner's submission that its exempted turnover was taxed and its willingness to deposit 25% of the disputed tax. The petitioner was directed to deposit 25% of the disputed tax in cash within thirty days of receiving the order. Additionally, the petitioner was required to file a reply to the DRC 01 notice, treating the impugned order as an addendum to the show cause notice, within the same thirty-day period. The second respondent was directed to pass fresh orders expeditiously, preferably within three months thereafter, after hearing the petitioner. The Court also stipulated that if the petitioner failed to comply with these conditions, the respondents would be at liberty to proceed as if the writ petition was dismissed in limine. No specific issue was left undecided, as the matter was disposed of with directions for fresh adjudication.

Facts

The petitioner, Tvl Sri Murugan Rice Mill, represented by its partner, filed a writ petition challenging an assessment order dated 17.02.2025 passed by the Assistant Commissioner (ST) for the tax period 2022-21. The impugned order noted that the petitioner failed to reply to a DRC 01 notice dated 25.11.2024 and did not respond to personal hearing notices. The petitioner argued that its entire exempted turnover had been taxed. The petitioner offered to deposit 25% of the disputed tax to demonstrate its bonafide.

Key Issues

1. Whether the assessment order passed by the Assistant Commissioner (ST) is liable to be quashed on the grounds that the petitioner's exempted turnover was taxed and that the petitioner did not receive proper opportunity to respond to notices? (Question of law and fact, concerning principles of natural justice and correct tax assessment under the GST enactments). Petitioner's arguments: The petitioner contended that the impugned order was erroneous as it taxed the petitioner's entire exempted turnover. The petitioner also indicated a willingness to deposit 25% of the disputed tax to show good faith. Revenue's arguments: The respondents (Commissioner of Commercial Taxes and Assistant Commissioner (ST)) did not explicitly record any arguments in the judgment. However, the judgment notes that the impugned order was appealable under Section 107 of the respective GST enactments, and the petitioner had not filed an appeal.