Facts of the Case

The petitioner, Tvl. Ideal Marketing, challenged an assessment order dated 31.10.2025 passed under Section 73 of the TNGST Act, 2017 for the year 2021-22, which was made ex-parte because the petitioner did not utilise the personal hearing opportunities. The order raised seven distinct discrepancies, including short payment of interest despite tax having been paid, a reconciliation gap of Rs.27,883/- between GSTR-1 and GSTR-9, an alleged excess ITC claim of Rs.28,877/- under Reverse Charge Mechanism, unreversed common ITC on non-business/exempt supplies, ineligible ITC claims, GSTR-9 late fee, and consequential interest and penalty. The petitioner's explanation for each discrepancy was that supporting evidence and payment proof had already been furnished but not properly considered, and that no physical notice of the personal hearing was served, the hearing notices having been uploaded only on the GSTN common portal, of which the petitioner had no knowledge.

Issues Involved

  1. Whether an ex-parte GST assessment order can be sustained where personal hearing notices were only uploaded on the common portal and not served physically, leaving the assessee unaware of the hearing dates.
  2. On what terms should such an ex-parte order be set aside and the matter remanded?

Petitioner's Arguments

  • The petitioner explained, discrepancy by discrepancy, that tax and interest for the alleged short payment had already been paid with proof; that the GSTR-1/GSTR-9 reconciliation difference did not exist as claimed and had been addressed in a filed reconciliation; that no excess ITC had actually been availed under Reverse Charge, attributing the apparent difference to a data-entry error; that no common ITC reversal was due since it deals only as a trader; and that GSTR-9 was filed without any late fee being charged by the portal itself.
  • In each instance, the petitioner explained non-participation in the assessment proceedings on the ground that the personal hearing notice/order was uploaded only on the GSTN common portal, without physical service, leaving it unaware of the opportunity to appear.

Respondent's Arguments

  • The Additional Government Pleader defended the assessment order as passed after granting the statutory opportunities available under the Act, following the taxpayer's non-response within the time prescribed in the show cause notice.

Court Order / Findings

  • The Court, considering the nature of the discrepancies, the explanations offered, and the reason given for non-availment of the hearing opportunity, held that an opportunity could equitably be granted to the assessee to present its case and produce supporting documents, subject to a condition of depositing 25% of the disputed tax amount, consistent with the equitable relief this Court has been extending in similar matters.
  • The writ petition was allowed on terms: the petitioner was directed to deposit 25% of the disputed tax within four weeks, upon which the impugned assessment order would stand set aside and the matter remanded to the assessing officer.
  • The petitioner was directed to appear and submit its reply and supporting documents, for the respondent to decide the matter afresh on merits and in accordance with law.
  • Any bank account attachment made pursuant to the impugned order was directed to stand raised upon the assessment order being set aside.

Important Clarification

Where a GST assessing authority relies solely on uploading personal hearing notices to the GSTN common portal, without any physical or independently verifiable service, and the assessee genuinely remains unaware of the hearing dates, an ex-parte assessment order passed in such circumstances is liable to be set aside on equitable terms — typically a partial pre-deposit — to allow the assessee a genuine opportunity to be heard on the merits of each discrepancy.

Sections Involved

  • Section 73, TNGST Act, 2017 — determination of tax not paid or short paid, or ITC wrongly availed, in non-fraud cases.
  • Section 169, TNGST Act, 2017 — prescribes the modes of service of notice/orders, relevant to whether portal-only upload constitutes valid service.
  • GSTR-1, GSTR-3B and GSTR-9 — the periodic and annual GST returns whose reconciliation formed the basis of several of the discrepancies raised.

Decision – In Favour of

The decision is in favour of the Assessee, subject to the condition of a 25% pre-deposit, with the assessment order set aside and the matter remanded for fresh adjudication after a genuine hearing.

Case Details

Court: Madras High Court, Madurai Bench
Case No.: W.P.(MD) No.13566 of 2026
Coram: Justice D. Bharatha Chakravarthy
Date of Order: 29.04.2026

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