Facts of the Case

The petitioner, Tvl. Jeyalakshmi, a proprietary concern, challenged an assessment order dated 24.11.2025 passed under Section 73 of the TNGST Act, 2017 for the financial year 2024-25. The assessment was made ex parte, on the ground that the petitioner was liable to be registered under the Act but had conducted business as an unregistered person and had failed to reply to the DRC-01 and ASMT notices. The petitioner's case was that the notices were uploaded only on the GST online portal and never separately communicated; the petitioner's auditor, who alone accessed the portal, was not informed by the department and, in any event, faced technical difficulty uploading replies, resulting in the assessee being wholly unaware of the proceedings until tax, interest and penalty were levied and recovery/bank attachment initiated.

Issues Involved

  1. Whether an ex-parte assessment order under Section 73 of the TNGST Act should be set aside where the assessee claims non-communication of notices uploaded only on the GST portal.
  2. The terms on which such an opportunity ought to be granted.

Petitioner's Arguments

  • The notices were uploaded only on the GST portal and never otherwise brought to the petitioner's or the auditor's effective notice, leaving no fair opportunity to reply before the assessment order was passed.
  • An opportunity be granted to present submissions and supporting documents before the assessing officer.

Respondent's Arguments

  • The Government Standing Counsel appeared and did not seriously contest that the impugned order had been passed ex parte for the stated reasons.

Court Order / Findings

  • Considering the nature of the discrepancies, the assessee's explanation on merits and the reasons given for not availing the earlier opportunity, the Court held that an opportunity could be granted on the condition of the petitioner depositing 25% of the disputed tax amount.
  • On such deposit within four weeks, the impugned order was to stand set aside and the matter remanded for fresh consideration, with the petitioner required to appear, file a reply and supporting documents.
  • Since the assessment order was set aside, any bank account attachment made pursuant to it was directed to stand raised.

Important Clarification

  • Courts consistently extend an opportunity to ex-parte GST assessees on equitable grounds, but subject to appropriate conditions — commonly a pre-deposit of a percentage of the disputed tax — balancing revenue's interest against the assessee's right to be heard on merits.
  • Where the underlying assessment order is set aside, any consequential bank attachment made to recover the demand must correspondingly stand raised.

Sections Involved

  • Section 73 of the TNGST/CGST Act, 2017 — determination of tax not paid, short paid or erroneously refunded, for reasons other than fraud.
  • Form GST DRC-01 and Form GST ASMT — procedural notices preceding the assessment order.

Decision – In Favour of

Allowed on terms, in favour of the Assessee — order set aside subject to 25% pre-deposit, matter remanded, and bank attachment lifted.

Case Details

Court: Madurai Bench of Madras High Court
Case No.: W.P.(MD)No.15336 of 2026 and W.M.P(MD)Nos.11501 & 11502 of 2026
Coram: Hon'ble Mr. Justice D. Bharatha Chakravarthy
Date of Order: 09.06.2026

Link to Download the Order

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