Facts of the Case

The petitioner, Tvl. D. Lingam Medicals, represented by its proprietor D. Devaraj, filed a writ petition under Article 226 of the Constitution of India challenging the assessment order dated 22.12.2025.

The petitioner sought a Writ of Certiorari to call for the records pertaining to the impugned order and quash it as illegal and in gross violation of the principles of natural justice.

The impugned assessment order was passed under Section 73 of the TNGST Act, 2017. The assessment was made ex parte because the petitioner had not utilised the opportunities provided during the assessment proceedings.

The discrepancy recorded by the authority was:

“Suppressed Sales Estimation.”

The petitioner’s explanation, as reproduced in the tabular summary on page 2 of the judgment, was that:

  • its registration certificate had been cancelled with effect from 01.04.2020;
  • the disputed Assessment Year was 2021-22;
  • during that period, the petitioner claimed to be an unregistered dealer;
  • the respondent had determined turnover at only ₹7,20,642;
  • according to the petitioner, aggregate turnover up to ₹20 lakh did not necessitate GST registration under Section 22 of the GST Act; and
  • therefore, the Section 73 order was alleged to be without jurisdiction.

The petitioner further explained that the impugned order had been uploaded on the GST portal without its knowledge because its registration had already been cancelled with effect from 01.04.2020.

Issues Involved

The principal issues involved were:

  1. Whether the ex parte assessment order dated 22.12.2025 passed under Section 73 of the TNGST Act, 2017 could be sustained.
  2. Whether the respondent had jurisdiction to make the impugned assessment for AY 2021-22 when the petitioner claimed that its GST registration had already been cancelled with effect from 01.04.2020.
  3. Whether the turnover determined at ₹7,20,642 attracted GST registration liability in light of the petitioner’s reliance on the ₹20 lakh threshold under Section 22.
  4. Whether the petitioner should be permitted to produce supporting documents concerning its claim of exemption/non-liability before the assessing officer.
  5. Whether the petitioner’s explanation for non-participation—namely, lack of knowledge of the portal-uploaded order after cancellation of registration—justified a fresh opportunity.
  6. Whether the usual condition requiring 25% payment/deposit should be imposed when the petitioner had raised a foundational question of jurisdiction.
  7. Whether any bank account attachment made pursuant to the impugned assessment order should continue after that assessment order was set aside.

Petitioner’s Arguments

The petitioner’s principal contention was that the impugned assessment was without jurisdiction.

The petitioner argued that its registration certificate had been cancelled with effect from 01.04.2020, whereas the disputed assessment related to 2021-22. According to the petitioner, it was therefore an unregistered dealer during the relevant period.

The petitioner further contended that the respondent itself had determined turnover at only ₹7,20,642. On that basis, it invoked Section 22 of the GST Act, asserting that aggregate turnover up to ₹20 lakh did not require GST registration.

Accordingly, the petitioner maintained that:

  • the alleged suppressed-sales assessment could not be sustained;
  • the order under Section 73 was without jurisdiction;
  • the petitioner should be allowed to place its explanation and supporting documents before the assessing authority; and
  • the jurisdictional objection under Section 22 required proper consideration.

Regarding non-participation, the petitioner explained that the impugned order was uploaded on the GST portal without its knowledge and that its registration had already stood cancelled from 01.04.2020.

These contentions are specifically captured in the table reproduced on page 2 of the judgment.

Respondent’s Arguments

The respondent was represented by the learned Government Standing Counsel.

The judgment records that the Court heard both the learned counsel for the petitioner and the learned Government Standing Counsel representing the respondent. However, the order does not separately reproduce any detailed independent counter-argument advanced by the respondent on the merits of:

  • the alleged suppressed sales;
  • the ₹7,20,642 turnover determination;
  • the Section 22 threshold;
  • the cancellation of registration with effect from 01.04.2020; or
  • the jurisdictional objection.

Therefore, for faithful reporting without changing the meaning of the judgment, no additional departmental argument should be attributed to the respondent beyond what is expressly recorded in the order.

Court Order / Findings

The Madras High Court considered:

  • the nature of the claim that the assessment was without jurisdiction;
  • the explanation provided by the assessee; and
  • the reason given before the Court for not availing the earlier opportunity.

The Court held that an opportunity could be granted to the assessee to:

  • present its submissions; and
  • produce relevant supporting documents in support of its claim of exemption before the respondent assessing officer.

The Court observed that it had been extending such opportunities on equitable grounds and therefore granted a fresh opportunity to the petitioner.

Most importantly, the High Court expressly held that because the question of jurisdiction was also raised, the usual condition of 25% was not imposed upon the petitioner.

The Court further clarified that it would be open to the petitioner to raise the question relating to jurisdiction with reference to Section 22 of the TNGST Act, 2017 before the assessing authority.

The writ petition was accordingly allowed on the following terms:

  • the impugned order dated 22.12.2025 was set aside;
  • the matter was remanded back to the respondent;
  • within four weeks from receipt of a web copy of the order, without waiting for a certified copy, the assessee must appear before the respondent without fail;
  • the assessee must submit its reply and documents in support of its claim;
  • the respondent must consider the matter afresh and pass orders in accordance with law;
  • since the assessment order was set aside, any bank account attachment made pursuant to the impugned order shall stand raised;
  • no costs were awarded; and
  • the connected miscellaneous petition was closed.

The reasoning concerning jurisdiction and waiver of the usual 25% condition appears on page 3, while the remaining operative directions, including lifting of bank attachment, appear on page 4.

Important Clarification

This judgment does not finally hold that the petitioner was exempt from GST merely because the turnover mentioned in the assessment was ₹7,20,642.

It also does not finally adjudicate that the respondent lacked jurisdiction.

The precise effect of the judgment is:

  • the petitioner raised a jurisdictional objection with reference to Section 22;
  • the Court considered that jurisdictional plea sufficiently material to justify a fresh opportunity;
  • because jurisdiction itself was questioned, the Court did not impose the usual 25% condition;
  • the petitioner was expressly permitted to raise the Section 22 jurisdictional issue before the assessing authority; and
  • the assessing authority must reconsider the matter afresh in accordance with law.

Therefore, the ruling is a remand for fresh adjudication, not a final declaration of exemption or non-liability.

A second important clarification is that cancellation of GST registration with effect from 01.04.2020 was part of the assessee’s explanation and jurisdictional case. The judgment does not lay down a broad proposition that cancellation of registration automatically eliminates all possible GST liability for every subsequent transaction or period.

A third important clarification is that the Court’s decision not to impose the usual 25% condition is expressly linked to the fact that a question of jurisdiction was raised. This is one of the most significant features of the order.

Sections Involved

Section 73 of the TNGST Act, 2017:
The impugned assessment order dated 22.12.2025 was expressly passed under this provision. The assessment was made ex parte after the petitioner failed to utilise the opportunities provided.

Section 22 of the TNGST Act, 2017:
The petitioner relied on this provision to contend that the turnover determined at ₹7,20,642 was below the ₹20 lakh threshold referred to by it and therefore raised a jurisdictional objection. The High Court expressly permitted this issue to be raised before the assessing authority on remand.

Article 226 of the Constitution of India:
The writ petition was filed under this provision seeking a Writ of Certiorari against the impugned assessment order.

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1783059444_360compressed.pdf

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