Facts of the Case

M/s. Sunshine International Agri Tech filed a writ petition under Article 226 of the Constitution of India challenging the impugned order dated 22.10.2024, described by the Court as an assessment order passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017. The petitioner also challenged an ASMT-10 notice dated 04.03.2026 issued under Section 61 of the GST Act for the same tax period, namely April 2022 to March 2023.

The petitioner’s principal grievance was that it had submitted a reply concerning the discrepancies mentioned in the show cause notice, but the impugned assessment order proceeded on the basis that no reply had been submitted at all.

The petitioner further raised grounds relating to the very jurisdiction of the proceedings, contending that the case arose from a surprise inspection and the proceedings thereafter. The petitioner’s counsel also relied upon certain decisions of the Hon’ble Supreme Court of India in support of the jurisdictional challenge. The judgment, however, does not identify those decisions by name.

The Court also recorded that the disputed amount of tax had already been recovered.

An important subsequent development occurred when the matter was listed under the caption “being mentioned”. By order dated 11.06.2026, the Court noted that although the second respondent had issued the notice and passed the order, in connected matters the fourth respondent had been directed to consider the issue. Therefore, clause (iii) of the original order dated 04.06.2026 was substituted so that the fourth respondent would reconsider the matter afresh and take a composite view along with other issues concerning the petitioner.

Issues Involved

The principal issues arising from the judgment were:

  1. Whether a Section 73 assessment order could be sustained when the taxpayer had filed a reply but the impugned order proceeded as if no reply had been submitted.
  2. Whether failure to consider a reply already placed on record vitiated the adjudication and required the assessment order to be set aside.
  3. Whether the petitioner should be permitted to submit an additional reply and supporting documents in fresh proceedings.
  4. Whether the petitioner could raise all grounds, including the question of jurisdiction, before the adjudicating authority.
  5. Whether jurisdictional objections arising from a surprise inspection and consequential proceedings required consideration in fresh adjudication.
  6. What effect should be given to the fact that the disputed tax amount had already been recovered.
  7. Whether, after correction of the original order, the fourth respondent should consider the issue afresh so that a composite view could be taken in relation to other issues concerning the petitioner.
  8. Whether the impugned ASMT-10 notice under Section 61 for the tax period April 2022 to March 2023 formed part of the overlapping controversy challenged in the writ petition.

Petitioner’s Arguments

The petitioner contended that it had duly filed a reply addressing the discrepancies referred to in the show cause notice. Despite this, the impugned order proceeded on the incorrect factual premise that the petitioner had not submitted any reply.

The petitioner argued that such non-consideration of the filed reply materially affected the validity of the assessment order and justified interference by the High Court.

The petitioner further submitted that substantial grounds had been raised concerning the very jurisdiction of the proceedings, particularly because the matter arose from a surprise inspection and the proceedings thereafter.

The petitioner’s counsel also relied upon certain judgments of the Hon’ble Supreme Court of India on the jurisdictional aspect. However, the High Court’s order does not disclose the names or citations of those Supreme Court decisions. Therefore, no specific case name should be attributed to the judgment beyond what is expressly recorded.

The petitioner sought quashing of the impugned assessment order and the impugned ASMT-10 notice relating to the same tax period.

Respondents’ Arguments

The learned Government Standing Counsel opposed the writ petition and submitted that it was the duty of the assessee to bring the relevant matter to the notice of the assessing officer.

The respondents further contended that the petitioner had not availed itself of the opportunities of personal hearing granted by the authority. Therefore, according to the respondents, the petitioner could not place the entire responsibility upon the assessing authority.

Court’s Findings

The Madras High Court considered the rival submissions and examined the material records. Upon perusal of the impugned order, the Court found a decisive factual defect: the assessment order proceeded as if the petitioner had not submitted any reply at all, whereas the record showed that the petitioner had in fact filed a reply.

On this basis, the Court held that the impugned order was liable to be set aside and that the petitioner should be afforded another opportunity.

The Court also took note of the statement that the disputed amount of tax had already been recovered.

The original order dated 04.06.2026 permitted the petitioner to file an additional reply and supporting documents and expressly allowed the petitioner to raise all grounds, including the question of jurisdiction, before the assessing authority.

However, the matter was subsequently listed for “being mentioned”, and on 11.06.2026 the Court corrected clause (iii). The Court observed that although the notice had been issued by the second respondent, the fourth respondent should consider the issue afresh in accordance with law, because the fourth respondent was considering other issues concerning the petitioner and a composite view could therefore be taken.

Court Order

The writ petition was allowed, with the following operative directions:

  • The impugned assessment order dated 22.10.2024 was set aside.
  • Within four weeks from the date of receipt of a web copy of the order, the petitioner was entitled to file an additional reply and supporting documents.
  • The petitioner was permitted to raise all grounds, including the question of jurisdiction, before the adjudicating authority.
  • The original clause (iii), which had directed the second respondent to reconsider the issue, was subsequently corrected by the order dated 11.06.2026.
  • Under the corrected clause (iii), even though the notice had been issued by the second respondent, the fourth respondent was directed to consider the issue afresh in accordance with law, since the fourth respondent was considering other issues concerning the petitioner, enabling a composite view to be taken.
  • No costs were awarded.
  • The connected miscellaneous petitions were closed.

Important Clarification

The most important clarification is that the operative direction contained in the original order dated 04.06.2026 was subsequently corrected on 11.06.2026. Therefore, the corrected order must be read as directing the fourth respondent, not the second respondent, to consider the matter afresh in accordance with law.

The reason expressly recorded by the Court was that the fourth respondent was already considering other issues concerning the petitioner, and assigning fresh consideration to that authority would enable a composite view to be taken in the matter.

A further clarification is that the High Court did not finally decide the petitioner’s jurisdictional objections on merits. Instead, it expressly permitted the petitioner to raise all grounds, including the jurisdictional question, before the authority in the fresh proceedings.

Further, although the petitioner’s counsel relied on certain decisions of the Hon’ble Supreme Court, the judgment does not provide their names or citations. Accordingly, no specific Supreme Court precedent should be presented as having been expressly relied upon unless independently verified from another authentic record.

Sections Involved

Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017: The impugned order dated 22.10.2024 was identified by the High Court as an assessment order passed under this provision.

Section 61 of the GST Act: The writ petition also referred to and challenged an ASMT-10 notice dated 04.03.2026 concerning the same tax period, April 2022 to March 2023.

Article 226 of the Constitution of India: The petitioner invoked the writ jurisdiction of the Madras High Court seeking a Writ of Certiorari against the impugned proceedings.

Link to download the order -

https://mytaxexpert.co.in/uploads/1783066204_375compressed.pdf 

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