M/S. Nandhi Fabrics vs. The Deputy State Tax Officer-2

Facts

The petitioner, M/s. Nandhi Fabrics, represented by its Partner D.K. Chandrasekaran, filed a writ petition challenging an Assessment Order dated 27.08.2024 and a consequential Rectification Order dated 07.11.2024, both issued by the Deputy State Tax Officer-2, Karur. The Assessment Order confirmed a proposal in a Show Cause Notice dated 17.05.2024, issued for the tax period 2019-20, in the absence of a reply from the petitioner. The writ petition was filed on 21.09.2026, after the limitation period for filing an appeal under Section 107 of the respective GST enactments had expired. The petitioner stated that a part of the disputed amount had already been recovered and expressed willingness to pre-deposit 50% of the disputed tax, less the amount already recovered, for de novo adjudication.

Held

The Court quashed the impugned Assessment Order dated 27.08.2024 and the Rectification Order dated 07.11.2024. The case was remitted back to the respondent for de novo adjudication, subject to the petitioner depositing 50% of the disputed tax, after deducting the amount already recovered, within thirty days of receiving a copy of the order. The petitioner was also directed to file a reply to the Show Cause Notice dated 17.05.2024, along with supporting documents, treating the Assessment Order as an addendum to the Show Cause Notice. The respondent was instructed to pass a final order on merits within three months of the petitioner's compliance. The Court noted that if the petitioner failed to comply, the respondent could proceed to recover the tax as if the writ petition was dismissed in limine. The Court also stipulated that due notice must be given to the petitioner before passing any final order. The issue of jurisdiction and violation of statutory provisions was implicitly addressed by allowing de novo adjudication upon compliance with the conditions.

Key Issues

1. Whether the impugned Assessment Order and Rectification Order are liable to be quashed for being without jurisdiction and in violation of statutory provisions, particularly in light of the expired limitation period for filing an appeal under Section 107 of the GST enactments? The petitioner argued that the orders were without jurisdiction and violated statutory provisions. The petitioner also contended that they were willing to pre-deposit 50% of the disputed tax, less any amount already recovered, for a fresh adjudication. The respondent, represented by the Government Advocate (Taxes), took notice of the writ petition.