Facts of the Case

The petitioner, M/s. Rajeswari Vilas, is engaged in the business of dealing in goods claimed to be wholly exempt from GST. An assessment order dated 16.12.2025 was passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act) for the assessment year 2021-22, primarily because the petitioner failed to upload documents supporting the exemption claim.

The petitioner submitted that due to unavoidable personal and business circumstances, it could not respond to the show cause notice or upload the necessary documentary evidence. Consequently, an ex-parte assessment order was passed, followed by recovery proceedings, including attachment of the petitioner's bank account. The petitioner challenged the assessment order before the Madras High Court.

Issues Involved

  1. Whether an ex-parte assessment order passed under Section 73 of the TNGST Act can be set aside where the taxpayer failed to produce documents due to genuine circumstances.
  2. Whether the petitioner should be granted another opportunity to establish that the goods dealt with were wholly exempt from GST.
  3. Whether the Court can remand the matter without insisting upon the usual pre-deposit considering the peculiar facts of the case.

Petitioner's Arguments

  • The petitioner contended that it deals exclusively in exempt goods and therefore no GST liability arose.
  • The assessment order was passed solely because supporting exemption documents could not be uploaded.
  • Due to unavoidable personal and business circumstances, the petitioner could not submit a reply to the show cause notice.
  • Since the assessment was passed ex-parte without examining the exemption claim, a fresh opportunity should be granted to produce all relevant documents before the assessing authority.

Respondent's Arguments

  • The respondent defended the assessment order passed under Section 73 of the TNGST Act based on the petitioner's failure to furnish documents supporting its exemption claim during the assessment proceedings.
  • The assessment was completed in accordance with law after the petitioner failed to respond to the show cause notice.

Court Order / Findings

The Madurai Bench of the Madras High Court allowed the writ petition and held that:

  • The impugned assessment order dated 16.12.2025 was set aside.
  • The matter was remanded to the assessing authority for fresh consideration.
  • The petitioner shall appear before the authority and produce all documents supporting its claim that the goods are exempt from GST.
  • The authority shall reconsider the matter strictly in accordance with law after examining the documents.
  • Although this Court generally directs deposit of 25% while remanding similar matters, such condition was not imposed in the present case because:
    • the petitioner was still within the statutory limitation period for filing an appeal; and
    • the petitioner claimed that the goods involved were entirely exempt from tax.
  • The petitioner was directed to cooperate for early completion of the assessment proceedings.
  • The authority was permitted to act upon the web copy of the High Court order without waiting for a certified copy.

Important Clarification

  • Mere failure to upload supporting documents may not permanently defeat a genuine exemption claim if sufficient cause is shown.
  • The High Court reiterated that ex-parte GST assessments may be interfered with where principles of natural justice require a fresh opportunity.
  • Relief without insisting on a pre-deposit may be granted in exceptional cases where the facts justify such relaxation.
  • Taxpayers claiming exemption should maintain complete documentary evidence and respond to departmental notices within the prescribed timelines to avoid adverse orders.

Sections Involved

  • Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act) – Determination of tax not paid, short paid, erroneously refunded or input tax credit wrongly availed or utilised (other than fraud cases).
  • Article 226 of the Constitution of India – Writ Jurisdiction of the High Court.

Link to Download the Order-https://mytaxexpert.co.in/uploads/1784630019_1799compressed.pdf

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