M/S Janci Stores vs. The Assistant Commissioner (St)-1

Held

The Court held that the impugned order dated 29.04.2024 suffered from a total non-application of mind. The reasoning provided in the operative portion of the order, which merely stated that the taxpayer's reply was considered and not accepted without any further elaboration or justification, demonstrated a failure to properly consider the petitioner's submissions. Consequently, the Court set aside the impugned order. The matter was remitted back to the respondent to pass a fresh order on merits and in accordance with law. As a condition for rehearing, the petitioner was directed to deposit 25% of the disputed tax to the credit of the respondent through its Electronic Cash Register. The Court clarified that if the demand is dropped, the deposited amount would be returned or adjusted, and if confirmed, it would be appropriated, with the balance to be recovered. Failure to deposit the amount would result in the writ petition being dismissed. The Court expressly left undecided the merits of the tax demand itself, focusing solely on the procedural defect in the impugned order.

Facts

The petitioner, M/s. Janci Stores, a super market, filed a writ petition challenging an order dated 29.04.2024 issued by the respondent, the Assistant Commissioner (ST), Sivakasi Assessment Circle. This order confirmed a demand following a notice DRC 01 dated 27.12.2023, to which the petitioner had submitted a reply on 23.01.2024. The petitioner contended that the impugned order demonstrated a total non-application of mind. The assessment year in question is 2018-19. The petitioner sought to quash the order and requested a fresh consideration of their representation with an opportunity for a personal hearing.

Key Issues

1. Whether the impugned order dated 29.04.2024, issued by the respondent, is vitiated by a non-application of mind, thereby violating statutory provisions and principles of natural justice? Petitioner's Contention: The petitioner argued that the respondent's order, which confirmed the demand after considering the petitioner's reply, indicated a complete lack of application of mind. The operative portion of the order simply stated that the taxpayer's reply was considered but not accepted, without providing any specific reasoning or addressing the content of the reply. This, according to the petitioner, rendered the order legally unsustainable. Respondent's Contention: The respondent did not explicitly record any arguments in defense of the order's reasoning. However, by issuing the order, the respondent implicitly contended that the demand was valid and the petitioner's reply was insufficient to warrant its cancellation.