Tvl Kannika Agencies vs. The State Tax Officer

Held

The Court decided to quash the impugned orders and remit the case back to the first respondent. The reasoning was that the assessment order was passed ex parte, in the absence of a reply to the Show Cause Notice. Despite the appeal being rejected on grounds of limitation, the Court, considering that the petitioner had already deposited 10% of the disputed tax, was inclined to provide an opportunity to the petitioner to present their case. The ratio decidendi is that in cases of ex parte orders where a substantial portion of the tax has been deposited, and the assessee agrees to further pre-deposit, the High Court may exercise its writ jurisdiction to allow the assessee to present their case on merits, even if the statutory appeal was rejected on limitation. The operative directions are that the petitioner must deposit an additional 15% of the disputed tax (totaling 25%) within thirty days of receiving the order. Subsequently, the petitioner must file a reply to the Show Cause Notice along with supporting documents. The first respondent shall then pass a final order on merits within three months of the reply and pre-deposit. Failure to comply with these stipulations will result in the writ petition being dismissed in limine. The Court expressly left undecided the merits of the petitioner's case, which will be decided by the first respondent.

Facts

The petitioner, Tvl Kannika Agencies, filed a writ petition challenging an assessment order dated 08.09.2025 for the tax period 2021-22, passed by the State Tax Officer (first respondent) under Section 73 of the GST enactment. This order was issued in the absence of a reply to a Show Cause Notice dated 25.07.2025. The petitioner had belatedly filed an appeal before the Appellate Authority on 14.06.2026, depositing 10% of the disputed tax (Rs. 31,069/-) out of a total demand of Rs. 3,10,677/-. The petitioner's primary business is the sale of petroleum products, which are outside GST, but they also sold miscellaneous items attracting GST. They failed to maintain separate accounts. The Appellate Authority rejected the appeal on 17.06.2026 due to being filed beyond the prescribed limitation period under Section 107 of the GST enactment. The petitioner then filed this writ petition on 22.09.2026.

Key Issues

1. Whether the High Court should entertain a writ petition challenging an assessment order when the statutory appeal remedy was rejected on grounds of limitation, and the petitioner has not complied with the prescribed time limits for filing appeals, as per Section 107 of the GST enactment and the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada vs. Glaxo Smith Kline Consumer Health Care Limited? 2. Whether the assessment order, passed ex parte in the absence of a reply to the Show Cause Notice, should be quashed and the matter remitted back to the assessing authority, considering the petitioner's deposit of 10% of the disputed tax and their agreement to deposit an additional 15%? Petitioner's arguments: The petitioner implicitly argues for leniency and a chance to present their case on merits, highlighting the ex parte nature of the order and their willingness to make further deposits. They seek to quash the impugned orders. Revenue's arguments: The revenue, represented by the Government Advocate (Taxes), does not appear to have formally argued its case on merits in the provided text, but their actions (issuing the SCN, assessment order, and the Appellate Authority's rejection of appeal) indicate their stance that the petitioner has failed to comply with statutory procedures and timelines.