Facts of the Case

Tvl.Maruthi Trading Corporation, a registered contractor providing street-light maintenance services in the Theni and Dindigul Municipalities, filed a writ petition challenging a GST assessment order dated 06.06.2023 (GSTIN 33ANAPC4782E1ZG/2020-21) passed by the Assistant Commissioner (CT), Theni-I Circle. For AY 2020-21, the petitioner had reported turnover of Rs. 62,92,708 from its work for the Kodaikanal Municipality, but the Municipality reported the petitioner's turnover as Rs. 2,62,45,600 — leading to a demand of Rs. 77,50,180 for alleged turnover mismatch. After the discrepancy came to light, the Municipality issued a fresh certificate, but the Assistant Commissioner had already passed the impugned demand order in the interim.

Issues Involved

  1. Whether the impugned GST assessment order, based on an admittedly erroneous turnover figure reported by the Municipality, could stand.
  2. Whether the assessment ought to be redone using the corrected certificate issued by the Municipality.

Petitioner's Arguments

  • The turnover reported by the Kodaikanal Municipality (Rs. 2,62,45,600) was grossly incorrect compared to the petitioner's actual reported turnover (Rs. 62,92,708).
  • A fresh, corrected certificate had already been obtained from the Municipality and should form the basis of any reassessment.
  • The impugned order should be quashed and the assessment redone after affording the petitioner a reasonable opportunity of hearing.

Respondent's Arguments

  • The Municipality (second respondent), through its counter affidavit, admitted that its engaged tax consultant had made a mistake in reporting the petitioner's turnover for 2020-21 as Rs. 2,62,45,600 instead of the correct figure of around Rs. 62,92,708 (after standard deductions for income tax, welfare fund and GST).
  • The Municipality's counter conceded that this error resulted in the impugned order and stated that the order needed to be modified by the first respondent based on the corrected figures.

Court Order / Findings

  • In view of the Municipality's own admission of error, the Court allowed the writ petition.
  • The impugned assessment order dated 06.06.2023 was set aside.
  • The first respondent (Assistant Commissioner) was directed to redo the assessment for 2020-21 using the fresh certificates issued by the Municipality, after giving the petitioner an opportunity of hearing.
  • No costs were awarded, and the connected miscellaneous petition was closed.

Important Clarification

This case is a useful reminder for contractors working with government/municipal bodies: turnover data reported by the client (here, a Municipality's tax consultant) directly feeds GST department assessments, and errors at that end can trigger large, incorrect demands. Getting a corrected certificate from the counter-party and placing it on record — as the petitioner did here — can be decisive in getting an erroneous assessment set aside for redoing, though the final tax outcome after reassessment still depends on the corrected figures being properly applied.

Sections Involved

  • Central Goods and Services Tax Act, 2017 (assessment and turnover verification provisions)
  • Tamil Nadu Goods and Services Tax Act, 2017 (State GST administration)

Decision – In Favour of

Decided in favour of the Petitioner — the impugned GST assessment order was set aside and remitted for fresh assessment based on corrected turnover figures.

Case Details

  • Court: Madurai Bench of Madras High Court
  • Case No.: W.P(MD)No.24407 of 2023 and WMP(MD) No.20598 of 2023
  • Coram: Hon'ble Mr. Justice B. Pugalendhi
  • Date of Order: 31.10.2023

Link to Download the Order

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