Facts of the Case

The petitioner, S.R. Agencies, engaged in the business of selling petrol and diesel through a retail petroleum outlet, challenged an assessment order dated 03.12.2025 passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act). The petitioner contended that the goods dealt with were entirely exempt from GST. However, since the petitioner failed to upload supporting documents establishing the exemption and did not respond to the show cause notice due to personal and business circumstances, the assessment was completed ex parte, resulting in the impugned order.

Issues Involved

  1. Whether an ex parte assessment order passed under Section 73 of the TNGST Act, 2017 should be sustained when the assessee failed to submit documents supporting exemption.
  2. Whether the petitioner should be granted another opportunity to produce evidence and contest the assessment.
  3. Whether the bank account attachment arising from the assessment order should continue after setting aside the assessment.

Petitioner’s Arguments

  • The petitioner is exclusively engaged in the sale of petroleum products, which are exempt from GST.
  • The assessment order was passed solely because supporting exemption documents were not uploaded.
  • Due to unavoidable personal and business circumstances, the petitioner could not respond to the show cause notice within the prescribed time.
  • The petitioner requested the Court to set aside the ex parte assessment and permit submission of relevant documents before the assessing authority.

Respondent’s Arguments

  • The assessment order was validly passed under Section 73 of the TNGST Act, 2017 after the petitioner failed to respond to the show cause notice or furnish supporting documents.
  • The assessment was completed in accordance with the statutory provisions due to non-compliance by the petitioner.

Court Order / Findings

The Madurai Bench of the Madras High Court observed that in similar cases where assessment orders are passed ex parte, the Court has consistently granted one more opportunity to the assessee to place the relevant materials before the assessing authority.

The Court further noted that:

  • The petitioner was still within the limitation period for filing an appeal.
  • The petitioner claimed to be engaged only in the sale of petroleum products, which are exempt from GST.
  • Considering the special facts and circumstances, the Court did not insist on the usual condition of depositing 25% of the disputed tax amount before remanding the matter.

Accordingly, the Court:

  • Set aside the assessment order dated 03.12.2025.
  • Remanded the matter to the assessing authority for fresh consideration.
  • Directed the petitioner to submit a detailed reply along with all supporting documents.
  • Directed the authority to reconsider the matter in accordance with law.
  • Ordered that any bank account attachment made pursuant to the impugned assessment order shall stand lifted.
  • Directed the petitioner to cooperate for the expeditious completion of the reassessment proceedings.

Important Clarification

  • An ex parte assessment under Section 73 of the TNGST Act, 2017 can be set aside where the assessee demonstrates genuine reasons for non-participation and seeks an opportunity to produce supporting evidence.
  • Courts may waive the condition of pre-deposit while remanding the matter if exceptional circumstances justify such relief.
  • Once the assessment order is set aside, consequential recovery measures such as bank account attachment cannot continue.
  • The assessing authority must provide a fair opportunity and pass a fresh order after considering all documents submitted by the assessee.

Sections Involved

  • Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017
  • Article 226 of the Constitution of India

Link to Download the Order-https://mytaxexpert.co.in/uploads/1784626812_1782compressed.pdf

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