Facts of the Case

Vinothkumar (GSTIN 33BAAPV0447H1ZV) was assessed ex parte under Section 73 of the TNGST/CGST Act, 2017 by an order dated 26.12.2025 for tax period 2021-22, confirming a total demand of Rs.5,41,760/- comprising tax of Rs.2,82,262/-, interest, penalty and late fee. The petitioner explained that he was unaware of the mismatch since the notices were uploaded only to the department portal, and physical reminders sent by postal service did not reach him in time to file a reply or attend a personal hearing, resulting in the ex parte order and a consequential attachment of his bank account. He also sought a refund of the tax amount already recovered.

Issues Involved

  1. Whether an ex-parte assessment order passed under Section 73, where the assessee did not receive physical intimation and only became aware of the discrepancy notice belatedly, should be set aside and remanded.
  2. Whether the bank attachment made pursuant to the impugned order should be lifted once the assessee has already deposited 100% of the disputed tax.

Petitioner's Arguments

  • The petitioner was not aware of the mismatch as the notices were only uploaded to the department portal, and though reminders were issued via postal service, he did not receive physical communication and hence could not appear for personal hearing or file a reply.
  • The petitioner sought quashing of the order and a refund of the sum of Rs.2,82,262/- already recovered, along with statutory interest.

Respondent's Arguments

  • The respondent, represented by the Government Standing Counsel, did not seriously dispute the petitioner's explanation regarding non-receipt of physical communication despite the department's efforts to send postal reminders.

Court Order / Findings

  • The Court examined the discrepancy and the explanations offered in a tabulated form, and noted that the petitioner did not appear for personal hearing or file a reply due to lack of effective notice despite the department's reminders via postal service.
  • The Court observed that it has been extending such opportunities on equitable grounds, subject to appropriate conditions, and since 100% of the disputed tax amount had already been remitted by the petitioner, no further condition was imposed.
  • The impugned order dated 26.12.2025 was set aside and the matter remanded, with a direction that the petitioner appear and submit a reply and supporting documents, for the respondent to pass fresh orders in accordance with law; the bank account attachment made pursuant to the impugned order was also directed to be raised.

Important Clarification

  • Where an assessee has already remitted 100% of the disputed tax demand arising from an ex parte GST assessment, courts examining a natural-justice challenge will typically remand the matter without imposing any further pre-deposit condition, unlike cases involving partial or no payment.
  • A consequential bank account attachment automatically falls away once the underlying assessment order that triggered it is set aside, and courts routinely direct the attachment to be raised as part of the same remand order.

Sections Involved

  • Section 73, TNGST/CGST Act, 2017 — demand provision under which the ex parte assessment order was passed.
  • Form GST DRC-07, CGST Rules, 2017 — the ex-parte assessment order format confirming the demand.
  • Bank Account Attachment, CGST Rules, 2017 — coercive recovery measure consequent to the confirmed demand, directed to be lifted here.

Decision – In Favour of

The decision is in favour of the assessee (Vinothkumar). The ex parte order was set aside, the bank attachment lifted, and the matter remanded for a fresh decision after affording an opportunity to be heard.

Case Details

Madurai Bench of Madras High Court; W.P.(MD)No.15310 of 2026 and W.M.P(MD)Nos.11453 & 11454 of 2026; Coram: Hon'ble Mr. Justice D. Bharatha Chakravarthy; Order dated 09.06.2026.

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