Facts of the Case

The petitioner, Tvl. Hotel Shree Deiva, represented by its proprietor R. Paulpandi, filed a writ petition under Article 226 of the Constitution of India challenging the assessment order dated 24.12.2025 passed by the Deputy State Tax Officer–2, Theni-1 Assessment Circle. The impugned assessment order was passed under Section 73 of the TNGST Act, 2017 for the Assessment Year 2021-22.

The assessment was made ex parte because the petitioner had not utilised the opportunities provided during the assessment proceedings. The discrepancy forming the basis of the proceedings related to information furnished in the return and the alleged conduct of business as an unregistered person despite being liable to registration under the Act. No reply had been filed by the petitioner before the assessing authority.

As specifically reflected in the comparative table appearing on page 3 of the judgment, the petitioner’s case was that notices in DRC-01 and ASMT notice had been uploaded only on the online portal. According to the petitioner, the GST portal was being handled by its auditor, the notices were not communicated to the petitioner, and consequently the petitioner remained unaware of the proceedings and could not file a reply. The impugned order thereafter levied tax, interest and penalty.

The petitioner further explained that portal-only uploading of notices created practical difficulty because auditors and tax practitioners generally accessed the GST portal, and such notices were allegedly not communicated to dealers. It was also contended that technical issues could sometimes prevent uploading replies and that the respondent had not sent the notices through any other mode before passing the assessment order.

Issues Involved

The principal issues before the High Court were whether the ex parte assessment order dated 24.12.2025 passed under Section 73 of the TNGST Act, 2017 should be sustained when the petitioner claimed that it could not participate because notices were uploaded only on the GST portal and were not brought to its knowledge; whether the petitioner should be granted a fresh opportunity to submit its explanation and supporting documents; and whether such relief could appropriately be made subject to a condition protecting the interests of the Revenue.

A further consequential issue concerned the status of any bank account attachment made pursuant to the impugned assessment order if that order were set aside.

Petitioner’s Arguments

The petitioner contended that the respondent had issued DRC-01 and ASMT notices, but the notices were uploaded only on the online GST portal. Since the GST portal was being handled by the petitioner’s auditor and the notices were not communicated to the petitioner, the petitioner claimed that it had no actual awareness of the proceedings and was therefore unable to file a reply.

It was further argued that portal-based communication caused practical difficulty for dealers because auditors and tax practitioners ordinarily handled GST portal access. The petitioner also referred to technical difficulties that could arise while uploading replies and asserted that the respondent had not sent notices through any alternative mode. On this basis, the petitioner sought an opportunity to place its submissions and supporting materials before the assessing authority.

Respondent’s Arguments

The respondent Revenue was represented by the learned Government Advocate. The assessment order had proceeded on the basis that opportunities had been provided but were not utilised by the petitioner, resulting in an ex parte assessment. The proceedings concerned the identified discrepancy relating to the petitioner allegedly conducting business as an unregistered person despite being liable to registration, and no reply had been filed before the assessing authority.

The judgment does not record a separate detailed counter-submission on merits by the respondent beyond the Revenue’s representation and the circumstances underlying the ex parte assessment. Therefore, no additional argument should be attributed to the respondent beyond what is reflected in the judicial order.

Court Order / Findings

The Madras High Court considered the nature of the discrepancies, the explanation offered by the assessee, and the reasons advanced 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 before the assessing officer.

The Court clarified that such opportunities had been extended on equitable grounds, but subject to appropriate conditions. Accordingly, the petitioner was granted a fresh opportunity on the condition of depositing 25% of the disputed tax amount.

The writ petition was allowed on the following substantive terms:

  • The petitioner must, within four weeks from receipt of the web copy of the order, deposit 25% of the disputed tax amount with the respondent, without waiting for a certified copy.
  • Upon such deposit, the impugned assessment order dated 24.12.2025 shall stand set aside.
  • The matter shall stand remanded to the respondent for fresh consideration.
  • The assessee must appear before the respondent without fail and submit its reply and documents supporting its claim.
  • The respondent shall consider the matter afresh and pass orders in accordance with law.
  • Since the impugned assessment order was set aside, any attachment of the bank account made pursuant to that order shall stand raised.
  • No costs were awarded, and the connected miscellaneous petitions were closed.

Important Clarification

The judgment does not finally adjudicate the underlying tax liability or the merits of the alleged registration-related discrepancy. The High Court granted a renewed opportunity to the assessee and remanded the matter for fresh adjudication. Therefore, the order should not be understood as a final finding that the tax, interest or penalty originally imposed was substantively incorrect.

The relief is also conditional rather than unconditional. The setting aside of the impugned order operates upon the petitioner depositing 25% of the disputed tax amount within four weeks from receipt of the web copy. The Court expressly permitted compliance without waiting for a certified copy of the judgment.

Another significant clarification is that the Court expressly directed that any bank account attachment made pursuant to the impugned assessment order shall stand raised, because the underlying assessment order itself was being set aside subject to compliance with the stipulated condition.

Sections

Section 73 of the TNGST Act, 2017 — Provision under which the impugned assessment order dated 24.12.2025 was passed.

Article 226 of the Constitution of India — Constitutional provision under which the petitioner invoked the writ jurisdiction of the High Court seeking a Writ of Certiorari to quash the impugned assessment order.

Link to download the order -https://www.mytaxexpert.co.in/uploads/1783067113_418compressed.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.