Facts of the Case

The petitioner, Tvl.ABI & Co., registered under GST (GSTIN: 33AEXPP0826Q1ZP), challenged the assessment order dated 01.12.2022 for the tax period 2018-2019. Due to the COVID-19 pandemic, the petitioner had been unable to continue its business and had accordingly filed nil returns. While the department went on to assess tax for the period, the petitioner did not avail the opportunity to participate in the enquiry proceedings on account of ill health.

Issues Involved

  1. Whether the petitioner, having missed the enquiry opportunity due to ill health during the pandemic period, deserved one further opportunity before the assessment was finalised.

Petitioner's Arguments

  • The petitioner submitted that due to the COVID-19 outbreak it had to stop business and filed nil returns, and that it could not attend the enquiry proceedings on account of ill health, seeking one more opportunity to be heard.

Respondent's Arguments

  • The respondents, represented by the Special Government Pleader for Commercial Taxes, did not seriously contest the request for one further opportunity.

Court Order / Findings

  • Considering the pandemic-related circumstances and the petitioner's ill health, the Court found it appropriate to grant one further opportunity rather than let the ex-parte-type assessment stand.
  • The impugned assessment order was quashed, and the respondents were directed to grant the petitioner one further opportunity to be heard, conduct the enquiry, and pass fresh orders based on the objections raised, within three months.
  • The petitioner was cautioned not to seek any adjournment and to attend the enquiry without fail.

Important Clarification

  • Where non-participation in GST assessment proceedings is attributable to genuine hardship such as pandemic-related business disruption or the assessee's ill health, courts are willing to set aside the resultant assessment and grant one further, final opportunity to be heard, rather than treat the assessee's initial default as conclusive.
  • Such relief is typically conditional on the assessee committing to participate without further adjournment, underscoring that it is a one-time indulgence and not an open-ended extension.

Sections Involved

  • Section 73 of the CGST/TNGST Act, 2017 (by implication, general assessment provisions) - governs determination of tax not paid, applicable to the assessment for 2018-19.
  • Article 226 of the Constitution of India - the writ jurisdiction invoked to challenge the assessment order.

Decision – In Favour of

The writ petition was allowed in favour of the Assessee, with the assessment order quashed and a fresh opportunity of hearing directed before any consequential order is passed.

Case Details

Madurai Bench of Madras High Court, W.P.(MD).No.22940 of 2023 with W.M.P.(MD).No.19152 of 2023; Coram: Hon'ble Mrs. Justice S. Srimathy; decided on 21 September 2023.

Link to Download the Order

Click here to view/download the full order

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.