Facts of the Case

M/s. TMA Infrastructure Private Limited (GSTIN 33AADCT8558Q1ZJ) challenged Order No. 11/2024-GST dated 23.04.2024, passed by the Assistant Commissioner of GST and Central Excise, Thanjavur Division, under Section 73 of the TNGST Act, 2017 for assessment years 2018-19 and 2019-20. The petitioner contended the order was cryptic, barred by limitation, non-speaking and passed without jurisdiction, particularly in view of the newly inserted Section 16(5) of the TNGST Act (inserted by the Finance (No. 2) Act, 2024), which retrospectively extends the time limit for claiming input tax credit for certain years. The petitioner had not availed the opportunity to respond when the show cause notice was uploaded, and the final order was passed ex-parte; consequently, the petitioner's bank account had also been frozen.

Issues Involved

  1. Whether the ex-parte Section 73 order should be set aside and the matter remanded, given the petitioner did not get an opportunity to reply.
  2. Whether the usual condition of a 25% pre-deposit for remand should be imposed where the underlying discrepancy is claimed to be covered by the newly inserted Section 16(5).
  3. The Section 16(5) retrospective ITC extension itself was raised as a ground but was not adjudicated by the Court.

Petitioner's Arguments

  • The impugned order was passed ex-parte because the petitioner could not respond when the show cause notice was uploaded online.
  • The discrepancy underlying the demand is covered by the retrospective extension of the ITC time limit introduced through Section 16(5) of the TNGST Act, inserted via the amendment to Section 16, and therefore the usual 25% deposit condition for remand should not be imposed.
  • The order should be set aside and the petitioner given a fresh opportunity to file a reply with supporting documents.

Respondent's Arguments

  • No specific opposing arguments beyond standard defence of the order are recorded; the Standing Counsel for the department is noted as appearing but no detailed resistance to remand is recorded in the order.

Court Order / Findings

  • The Court found that the petitioner had not availed the opportunity to respond to the show cause notice, and the order came to be passed ex-parte.
  • Taking into account the petitioner's submission that the discrepancy was covered by the Section 16(5) amendment, the Court departed from its usual practice of imposing a 25% pre-deposit condition on remand.
  • The impugned order dated 23.04.2024 was set aside and the matter remitted to the respondent, with the petitioner directed to appear, file a reply and produce supporting documents, and the respondent directed to pass a fresh order in accordance with law as expeditiously as possible.
  • The freezing of the petitioner's bank account was directed to be lifted since the matter stood remanded.
  • The Court did not itself rule on the scope or applicability of the Section 16(5) ITC extension to the petitioner's facts — that determination is left to the assessing authority on remand.

Important Clarification

This order is a procedural remand granted because the assessment was ex-parte, with the added feature that the Court waived its customary 25% pre-deposit condition because of the Section 16(5) ITC-extension ground raised by the petitioner. It is not a ruling on whether Section 16(5) actually saves the petitioner's ITC claim for 2018-19/2019-20 — that substantive question will be examined afresh by the Assistant Commissioner. Taxpayers relying on the Section 16(5)/16(6) retrospective ITC relief should still present their case in detail before the assessing authority rather than assume the point is settled by this order.

Sections Involved

  • Section 73, Tamil Nadu Goods and Services Tax Act, 2017 — determination of tax not paid/short paid, other than by reason of fraud.
  • Section 16(5), Tamil Nadu Goods and Services Tax Act, 2017 — inserted by the Finance (No. 2) Act, 2024, extending the time limit to avail input tax credit for specified financial years.
  • Article 226, Constitution of India — writ jurisdiction (Certiorarified Mandamus) invoked.

Decision – In Favour of

Disposed of in favour of the petitioner to the extent of setting aside the ex-parte order and remanding without a pre-deposit condition — the actual entitlement to ITC under Section 16(5) remains to be decided afresh by the department.

Case Details

  • Court: Madurai Bench of the Madras High Court
  • Case No.: W.P.(MD) No. 13380 of 2026 with W.M.P.(MD) Nos. 9946 and 9947 of 2026
  • Coram: Hon'ble Mr. Justice D. Bharatha Chakravarthy
  • Date of Order: 29 April 2026

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