Tvl. Devaerakkam Mercy Mary vs. The Assistant Commissioner (St)

Held

The Court held that the impugned order was passed in breach of the principles of natural justice as the petitioner was not heard. The Court noted that the order dealt with two distinct issues: GST on seigniorage and failure to report taxable supplies. For the issue of GST on seigniorage, the Court followed a precedent where similar orders were set aside subject to the petitioner remitting 10% of the tax demand. For the issue of failure to report taxable supplies, the Court directed reconsideration subject to the petitioner remitting 25% of the tax demand. The petitioner agreed to these terms. Consequently, the impugned order was set aside and the matter was remanded to the respondent for reconsideration. The Court directed that a fresh order be issued within five months after the petitioner makes the remittances within 30 days of receiving the order. The Court also directed that any order on remand concerning seigniorage shall not be implemented until the Supreme Court pronounces its judgment in S.L.P. (Civil) No.37326 of 2017. The bank attachment was ordered to be raised upon fulfillment of the conditions.

Facts

The petitioner, Tvl. Devaerakkam Mercy Mary, represented by its proprietor, filed a writ petition challenging an order dated 03.06.2026 passed by the Assistant Commissioner (ST), Palayamkottai Assessment Circle, Tirunelveli. The impugned order pertains to the tax period 2022-23 and deals with the imposition of GST on seigniorage and the non-reporting of taxable supplies. A consequential order was also passed on 04.06.2026. The petitioner contended that these orders were passed without adhering to the principles of natural justice, specifically without providing a hearing. The respondent is the Assistant Commissioner (ST). The amount in dispute is not explicitly stated, but the orders relate to GST on seigniorage and failure to report taxable supplies.

Key Issues

1. Whether the impugned order dated 03.06.2026, passed by the respondent, is liable to be quashed for violating the principles of natural justice, specifically the right to be heard, under Article 226 of the Constitution of India? Petitioner's arguments: The petitioner argued that the order was passed without affording them an opportunity to be heard, thus violating the principles of natural justice. They sought to quash the order on grounds of illegality and lack of jurisdiction. Revenue's arguments: The respondent, represented by the Government Advocate (Taxes), accepted notice. The judgment does not explicitly record separate arguments from the revenue beyond accepting notice and the court's observations on the matter. However, the court's directions imply a need for reconsideration of the issues raised in the order.