Tvl. Pooja Shri Traders vs. The Deputy State Tax Officer - 1

Held

The Court held that the petitioner could not avail the opportunity during the original assessment proceedings and was not able to prove their case. However, considering that the petitioner diligently pursued the matter through rectification applications and that the issue pertains to dealing with exempt goods, the Court decided to grant one more opportunity to the petitioner on equitable grounds. The impugned orders dated 30.12.2025 and 05.06.2026 were set aside, and the matter was remanded back to the respondent. The petitioner was directed to file their reply and supporting documents within four weeks, and the respondent was directed to consider them in accordance with law. Any attachment of the bank account made pursuant to the impugned order was also ordered to be raised. No additional conditions were imposed as the issue related to exempt goods.

Facts

The petitioner, Tvl. Pooja Shri Traders, filed a writ petition challenging an order of assessment dated 30.12.2025 passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017, and a subsequent order dated 05.06.2026 rejecting their rectification applications. The petitioner contended that they deal with coconut, which are exempt goods, and that this discrepancy was pointed out. The respondent is the Deputy State Tax Officer - 1, Madurai Rural South Assessment Circle. The petitioner sought to quash the impugned orders for violating principles of natural justice and requested a fresh assessment with a personal hearing. The bank, Karyur Vysya Bank, was also listed as a respondent, likely due to potential attachment of accounts.

Key Issues

1. Whether the impugned orders passed by the Deputy State Tax Officer violated the principles of natural justice, specifically by failing to provide an adequate opportunity for the petitioner to present their case regarding the classification of goods as exempt? Petitioner's arguments: The petitioner argued that they deal with exempt goods (coconut) and that the assessment orders were passed in gross violation of the principles of natural justice. They contended that despite pointing out the discrepancy, their claim was disallowed, and they were not given a proper opportunity for a personal hearing. Revenue's arguments: The learned Government Standing Counsel argued that when an assessee claims to be dealing with exempt goods, the onus is on the assessee to take a specific plea and file supporting documents in respect thereof.