Facts of the Case

The Joint Commissioner/Executive Officer of Arulmigu Ramanathaswamy Temple, Rameswaram (GSTIN 332400002493TMP), challenged an assessment order dated 10.07.2025 passed under Section 74 of the TNGST Act, 2017 for the assessment year 2022-23, along with the consequential demand notice in Form GST DRC-07 dated 16.07.2025. It was undisputed on record that personal hearing notices were issued to the petitioner-temple on as many as three separate occasions, but on each occasion the petitioner did not appear, instead writing to the respondent to seek further time on the ground that it was yet to receive guidance from its superior administrative authority before it could respond on merits.

Issues Involved

  1. Whether an assessment order under Section 74 should be set aside and the matter remanded for a fresh opportunity, notwithstanding that the assessee's repeated non-appearance and its explanation for seeking adjournment were not found to be an acceptable justification.
  2. Whether the public and charitable character of the assessee — a temple administered by a Joint Commissioner/Executive Officer — is a relevant factor in exercising such discretion.

Petitioner's Arguments

  • The temple sought that the impugned assessment order and the consequential DRC-07 demand be quashed and the matter remanded for redoing the assessment after affording a reasonable and effective opportunity of hearing.
  • It sought that the documents it wished to furnish in support of its case be considered by the respondent before any fresh order is passed.

Respondent's Arguments

  • The State Tax Officer (Intelligence Wing) had issued personal hearing notices on three separate occasions in the course of the Section 74 proceedings, none of which drew a substantive response from the petitioner beyond repeated requests for further time.

Court Order / Findings

  • The Court held in clear terms that the petitioner's explanation for not appearing despite three notices — that it was awaiting guidance from a superior authority — was not acceptable as a justification for its repeated non-appearance.
  • Nevertheless, taking into account that the interest of the temple, a public religious institution, was involved in the outcome of the assessment, the Court exercised its discretion to quash the impugned order and remand the matter to the respondent rather than leave the temple to face an ex-parte demand.
  • The petitioner was directed to appear before the respondent on a specific fixed date, produce all relevant records on that date, and submit its reply in person then and there, following which the respondent was directed to proceed in the matter in accordance with law.

Important Clarification

  • Even where an assessee's reasons for repeated non-appearance before the tax authority are found wholly unconvincing on their own terms, courts may still exercise equitable discretion to remand the matter for one final opportunity where the assessee is a public or charitable institution whose interests are at stake, provided the remand is accompanied by a firm, non-negotiable compliance timeline (appearance, production of records and reply, all on a single fixed date) rather than an open-ended opportunity.

Sections Involved

  • Section 74, TNGST Act, 2017 — determination of tax involving fraud, wilful misstatement or suppression of facts, with a mandatory pre-decisional hearing.
  • Form GST DRC-07 — summary of the order creating the tax demand consequent on the Section 74 assessment.

Decision – In Favour of

The writ petition was allowed in part in favour of the Assessee, on equitable considerations rather than a finding that the department's procedure was defective, remanding the matter with a strict timeline for compliance.

Case Details

Court: Madurai Bench of the Madras High Court
Case No.: W.P.(MD)No.34563 of 2025
Coram: Hon'ble Mr. Justice G.R. Swaminathan
Date of Order: 28.11.2025

Link to Download the Order

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