Facts of the Case

The petitioner, Tvl. Hotel Shree Deiva, challenged an assessment order dated 20.12.2025 passed by the Deputy State Tax Officer under Section 73 of the TNGST Act, 2017 for the Assessment Year 2021-22.

The assessment order was passed ex parte, alleging that the petitioner had conducted business as an unregistered person despite being liable for registration. Since no reply was filed to the notices uploaded on the GST portal, the respondent confirmed tax, interest and penalty.

The petitioner submitted that all notices, including DRC-01 and ASMT notices, were uploaded only on the GST portal. The petitioner's auditor handled the GST portal but failed to communicate these notices to the petitioner. Consequently, the petitioner remained unaware of the proceedings and could not file a reply before the assessment order was passed.

 Issues Involved

  1. Whether an ex parte assessment order passed under Section 73 of the TNGST Act should be sustained when notices were uploaded only on the GST portal and the assessee failed to respond.
  2. Whether the assessee deserved another opportunity to submit its reply and supporting documents before the Assessing Authority.
  3. Whether equitable relief could be granted subject to payment of a portion of the disputed tax.

 

Petitioner's Arguments

  • The petitioner contended that all statutory notices were uploaded only through the GST portal.
  • The GST portal was being managed by the petitioner's auditor, who failed to communicate the notices.
  • As a result, the petitioner had no knowledge of the proceedings and was unable to submit objections.
  • The petitioner further submitted that taxpayers frequently face practical and technical difficulties in accessing notices or uploading replies on the GST portal.
  • Since no effective opportunity of hearing was actually availed, the assessment order deserved to be set aside and remanded for fresh consideration.

 

Respondent's Arguments

  • The Revenue submitted that statutory notices had been duly uploaded on the GST portal.
  • Since the petitioner failed to respond despite the notices being available online, the respondent proceeded to complete the assessment under Section 73.
  • Accordingly, tax, interest and penalty were rightly imposed by passing the impugned assessment order.

 

Court Order / Findings

The Madras High Court observed that:

  • The assessment had been completed ex parte because the petitioner had not utilised the opportunity available.
  • Considering the nature of the discrepancies, the explanation offered by the assessee, and the reasons assigned for non-participation, the Court found that the petitioner deserved one more opportunity to present its case.
  • The Court reiterated that similar opportunities have been granted on equitable grounds in appropriate cases, subject to reasonable conditions.

Accordingly, the Court passed the following directions:

  • The petitioner shall deposit 25% of the disputed tax amount within four weeks.
  • Upon such deposit, the assessment order dated 20.12.2025 shall stand set aside.
  • The matter shall stand remanded to the Assessing Officer for fresh adjudication.
  • The petitioner shall appear before the authority and submit all replies and supporting documents.
  • The Assessing Officer shall pass a fresh order in accordance with law.
  • Any attachment of the petitioner's bank account arising out of the impugned assessment shall automatically stand lifted.

The writ petition was accordingly allowed.

 

Important Clarification

  • Mere uploading of notices on the GST portal may, in appropriate circumstances, justify granting another opportunity where sufficient cause is shown for non-participation.
  • The High Court exercised its writ jurisdiction on equitable grounds while balancing the interests of revenue by directing payment of 25% of the disputed tax.
  • Setting aside of the assessment was made conditional upon compliance with the pre-deposit requirement.
  • The judgment reiterates that ex parte GST assessments can be remanded where principles of natural justice warrant fresh consideration.

 

Sections Involved

  • Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017
  • Article 226 of the Constitution of India
  • GST DRC-01 Proceedings
  • ASMT Proceedings

 Link to download the order-https://mytaxexpert.co.in/uploads/1783925897_403compressed.pdf

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