M/S. Nandhi Fabrics vs. The State Tax Officer(Fac)

Facts

The petitioner, M/s. Nandhi Fabrics, represented by its Partner D.K. Chandrasekaran, filed a writ petition challenging an Assessment Order dated 18.02.2025, issued by the Respondent, the State Tax Officer (FAC), Karur-3 Assessment Circle. This order confirmed the proposal in a Show Cause Notice dated 08.07.2024, issued under DRC 01, in the absence of a reply from the petitioner. The petitioner filed the writ petition on 21.09.2026, after the limitation period for filing an appeal under Section 107 of the respective GST enactments had expired. The petitioner indicated a willingness to pre-deposit 50% of the disputed tax, less any amount already recovered, as a condition for de novo adjudication.

Held

The Court quashed the impugned Assessment Order dated 18.02.2025 and remitted the case back to the respondent for de novo adjudication. This decision was made subject to the petitioner complying with specific conditions. Firstly, the petitioner must deposit 50% of the disputed tax, after deducting any amount already recovered, in cash from the petitioner's Electronic Cash Register within thirty days of receiving the order. Secondly, the petitioner must file a reply to the Show Cause Notice dated 08.07.2024, along with supporting documents, treating the impugned order as an addendum to the show cause notice. The respondent is directed to pass a fresh order on merits within three months of the petitioner's compliance. The Court noted that the limitation period for filing an appeal had expired, and the writ petition was filed after that period. The Court's reasoning for quashing and remanding was based on the petitioner's willingness to pre-deposit and file a reply, thereby seeking an opportunity to present their case. The Court also stipulated that if the petitioner fails to comply, the respondent can proceed to recover the tax as if the writ petition was dismissed. The respondent must provide due notice before passing any final order.

Key Issues

1. Whether the impugned Assessment Order dated 18.02.2025, issued by the Respondent, is without jurisdiction and in clear violation of statutory provisions, warranting quashing under Article 226 of the Constitution of India? Petitioner's Contention: The petitioner argued that the impugned order was without jurisdiction and a violation of statutory provisions. The petitioner also submitted an endorsement agreeing to pre-deposit 50% of the disputed tax, less any amount already recovered, to facilitate a fresh adjudication. Respondent's Contention: The respondent, represented by the Government Advocate (Taxes), took notice of the petition. No specific arguments were recorded for the respondent regarding the merits of the case or the petitioner's challenge to the order's jurisdiction or statutory compliance. The respondent's counsel did not oppose the petitioner's request for a de novo adjudication subject to pre-deposit.