Facts of the Case

The petitioner's late father, Kanagaraj Thangavelsamy, was assessed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017 vide order dated 29.08.2024, arising from discrepancies noticed on reconciling GSTR-1 with GSTR-3B, resulting in a difference in reported turnover. A show cause notice preceded the order, but no reply was filed and the assessment proceeded ex parte. The petitioner's subsequent statutory appeal, filed beyond the condonable period, was rejected by the first respondent on 30.04.2025 on limitation. The petitioner cited his late father's serious health issues as the reason for non-participation and non-filing of the appeal in time, and had already deposited 10% of the disputed tax while filing the appeal.

Issues Involved

  1. Whether the delay in filing the statutory appeal against the ex-parte Section 73 assessment ought to be condoned in view of the assessee's health condition.
  2. On what terms could the ex-parte assessment be reopened to allow the assessee to explain the GSTR-1/GSTR-3B discrepancy on merits.

Petitioner's Arguments

  • Owing to serious health issues, the deceased assessee could not respond to the show cause notice or file the statutory appeal within the condonable period.
  • If afforded a fresh opportunity, the petitioner would effectively appear and explain the discrepancy in reconciliation on merits.

Respondent's Arguments

  • It was for the assessee to avail the opportunity at the show cause notice stage itself, and even the appeal was not filed within the prescribed time, but beyond the condonable limit.

Court Order / Findings

  • The Court considered the reasons for non-participation (health issues) and the explanation offered on the merits of the discrepancy, and found that the petitioner should be afforded an opportunity, subject to conditions.
  • Since the petitioner had already deposited 10% of the disputed tax while filing the appeal (against the Court's usual practice of directing 25% for such relief), the petitioner was directed to deposit the balance 15%, upon which both the appellate rejection order and the underlying assessment order would stand set aside and the matter remitted for fresh consideration.
  • The petitioner was directed to appear before the assessing authority, file a reply, and produce supporting documents, with the authority to decide the matter afresh in accordance with law.

Important Clarification

Where an ex-parte GST assessment arising from a GSTR-1/GSTR-3B reconciliation mismatch is challenged after the statutory appeal was rejected on limitation, courts routinely grant a fresh opportunity to explain the discrepancy on equitable terms — commonly a deposit of 25% of the disputed tax — with credit given for any part-deposit already made at the appeal stage, so only the shortfall need be paid to trigger remand.

Sections Involved

  • Section 73, Tamil Nadu Goods and Services Tax Act, 2017 – governs determination of tax not paid or short paid, other than by reason of fraud, and was the basis of the ex-parte assessment for GSTR-1/GSTR-3B mismatch.
  • GSTR-1 and GSTR-3B – the outward-supply and summary monthly returns whose reconciliation discrepancy triggered the assessment.

Decision – In Favour of

The writ petition was disposed of with the assessment and appellate rejection order set aside on deposit of the balance 15% disputed tax and remand for fresh consideration — favouring the Assessee procedurally, without a decision on the merits of the turnover discrepancy itself.

Case Details

Court: Madurai Bench of Madras High Court
Case No.: W.P.(MD)No.14018 of 2026
Coram: Hon'ble Mr. Justice D. Bharatha Chakravarthy
Date of Order: 30.04.2026

Link to Download the Order

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