Tvl.Sri Valavanthal Oil Mill vs. The State Tax Officer

Held

The Court allowed the writ petition, setting aside the impugned assessment order dated 05.07.2023. The Court reasoned that while the petitioner failed to respond to the notices and participate in the proceedings, their claim of being unaware of the notices and the order, especially in the context of the COVID-19 pandemic, warranted an opportunity to present their case. The Court noted the petitioner's willingness to deposit 10% of the disputed tax. The impugned order was quashed and treated as an addendum to the show cause notice dated 13.02.2023. The petitioner was directed to file a reply to the show cause notice within 30 days of receiving the order, and the respondent was directed to pass a fresh order on merits within three months. The petitioner was also directed to cooperate with the respondent, failing which the respondent could pass orders based on available materials. The ratio decidendi is that a taxpayer, under exceptional circumstances like a pandemic, may be granted an opportunity to present their case even if procedural lapses occurred, provided they show willingness to comply with certain conditions.

Facts

The petitioner, Tvl.Sri Valavanthal Oil Mill, represented by its Proprietor, filed a writ petition challenging an assessment order dated 05.07.2023 passed by the respondent, the State Tax Officer, for the tax period 2020-21. The impugned order was passed after the issuance of notices in GST DRC 01A and GST DRC 01, and personal hearing notices. However, the petitioner claimed to be unaware of these notices and the subsequent order, which prevented them from filing a statutory appeal within the prescribed time. The petitioner also highlighted that the dispute arose during the COVID-19 pandemic lockdown period.

Key Issues

1. Whether the petitioner was duly served with the show cause notices and personal hearing notices preceding the impugned assessment order, and if not, whether the assessment order is liable to be quashed on this ground? The petitioner argued that they were unaware of the show cause notice and the impugned order, leading to their failure to participate in the proceedings and file a statutory appeal in time. They contended that the circumstances during the COVID-19 lockdown contributed to their lack of awareness. The respondent, represented by the Additional Government Pleader, did not appear to have made specific arguments on the service of notices or the petitioner's awareness, but implicitly supported the validity of the impugned order by appearing before the court.