Vinayak Enterprises vs. The Deputy Commissioner(St)
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Before: and
This writ petition challenges the impugned assessment order, DRC 07 dated 23.01.2025 bearing a Reference No. ZD330125190108N passed by the 2nd respondent and consequential attachment notice bearing Reference No. A4/04/2025 dated 19.05.2026 passed by the 1st respondent, which is an assessment order passed under Section 73 of the TNGST Act 2017. 2. I have heard the learned counsel for the petitioner and the learned Government Pleader representing the revenue.
By the impugned orders, the assessment was made ex parte because the petitioner did not utilise the opportunities provided. The discrepancies and grounds on which the assessment order was issued, the dealer’s explanation on merits, and the reasons for not participating in the assessment proceedings are summarised briefly and presented in a table below: 2 https://www.mhc.tn.gov.in/judis Discrepancies found/Grounds on which the order is passed Explanation offered by the Assessee on merits Explanation for not availing the opportunity Mismatch between GSTR 2A & 3B Claimed ineligible ITC – Violation of Section 17 Violation of Rule 86B Failure to furnish annual returns Interest u/s. 50 The Petitioner respectfully submits that he has duly maintained books of accounts, sales registers, tax invoices, GST returns, and all other statutory records as required under the provisions of the CGST/TNGST Act, 2017. The transactions reflected in the returns are genuine business transactions relating to the supply of fuels to boats and marine vessels, duly supported by valid tax invoices
and contemporaneous accounting records, which are available both with the Petitioner and on the GST common portal for verification. The alleged discrepancies arise on account of a bona fide difference between Form GSTR-2A and Form GSTR-3B, alleged ineligible Input Tax Credit under Section 17, and other related observations, including Rule 86B and annual return compliance, all of which are purely reconciliatory and interpretational in nature and do not, by themselves, establish any tax liability or wrongdoing. The Petitioner submits that all conditions under Section 16(2) of the CGST/TNGST Act have been substantially complied with, and the availment of Input Tax Credit is supported by valid tax invoices and receipt of goods/services, while any variation in auto-populated data in GSTR-2A is only a reflection of system- generated entries. The Petitioner further submits that the entire demand is based on a mechanical appreciation of mismatches without proper verification of books of accounts or independent reconciliation of records. Had an effective opportunity been granted, the Petitioner would have produced complete reconciliations, ledger extracts, supplier-wise details, and supporting documents to substantiate the claims and satisfactorily explain the alleged discrepancies. I am not conversant with computer systems and the online GST portal and had entrusted the responsibility of filing GST returns and attending to all GST-related compliances to a part-time accountant. I was under the bona fide belief that the said accountant would diligently monitor the GST portal and comply with all statutory requirements. However, due to his inadvertence and negligence, the Show Cause Notice and the subsequent assessment order uploaded on the GST portal were not brought to my notice. Consequently, I remained unaware of the proceedings and was deprived of an opportunity to submit my objections, explanations, and supporting documents before the authorities. I further submit that my failure to respond to the Show CauseNotice was neither wilful nor deliberate, but solely due to the aforesaid circumstances beyond my knowledge. Had the notice been brought to my attention, I would have promptly appeared before the respondent authorities and furnished all relevant records in support of my case. As a result of my non-awareness of the proceedings, the impugned ex parte assessment order came to be passed without the benefit of my explanation and supporting documents, causing serious prejudice to me. 3 https://www.mhc.tn.gov.in/judis
Considering the nature of the discrepancies noted, the explanation provided by the assessee and the reason given before this Court for not availing the opportunity, I believe that an opportunity can be granted to the assessee to present their submissions and produce the relevant supporting documents before the respondent assessing officer. This Court has been extending such opportunities on equitable grounds; however, under appropriate conditions. Therefore, an opportunity is granted to the petitioner assessee on the condition of depositing 25% of the disputed tax amount.
In view of this, the writ petition is allowed on the following terms:- i. Within four weeks of receiving the web copy of the order, the petitioner shall deposit 25% of the disputed tax amount with the respondent, without waiting for a certified copy of the order. 4 https://www.mhc.tn.gov.in/judis ii. Upon such deposit, the impugned assessment order, DRC 07 dated 23.01.2025 bearing a Reference No. ZD330125190108N passed by the 2nd respondent and consequential attachment notice bearing Reference No. A4/04/2025 dated 19.05.2026 passed by the 1st respondent shall stand set aside, and the matter shall stand remanded back to the file of the respondent. iii. The assessee shall appear before the respondent without fail and submit their reply and documents in support of their claim, and it is for the respondent to consider the matter afresh and pass orders in accordance with law. iv. Since the impugned order of assessment is set aside, any attachment of the bank account made pursuant to the impugned order shall stand raised. v. No costs. Consequently the connected miscellaneous petitions shall stand closed. 24.06.2026 (1/5) NCC:Yes/No rgm 5 https://www.mhc.tn.gov.in/judis D.BHARATHA CHAKRAVARTHY
, J.
rgm To 1. The Deputy Commissioner(ST), Office of the Assistant Commissioner (ST), Tuticorin.
The Commercial Tax Officer, Office of the Assistant Commissioner (ST), Tuticorin III Circle, C.T.Buildings 282 North Beach Road, Tuticorin - 628 001 and W.M.P(MD)No.13035 and 13038 of 2026 24.06.2026 (1/5) 6 https://www.mhc.tn.gov.in/judis
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.