Tvl.Sharsgreen Enterprises vs. The State Tax Officer
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Before: and
This writ petition challenges the impugned order dated 23.04.2025, 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 Standing Counsel 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 The respondent, based on audit objections, alleged turnover mismatch, E-Way Bill discrepancy, excess ITC, Rule 42 reversal, reverse charge liability, taxability of other income, freight expenses, trade creditors and non-filing related discrepancies. The respondent confirmed a tax demand of Rs. 69,87,245/- together with interest and penalty under Section 73 of the TNGST Act. Export turnover was wrongly treated as exempt turnover for Rule 42 reversal. GST was also levied
on amounts reflected as "other income" and "trade creditors" merely on the basis of financial statements. The impugned
order mechanically confirmed the audit objections without proper verification of books of accounts and supporting records. The alleged discrepancies are fully reconcilable from books of accounts, invoices, purchase registers, sales registers and export records maintained by the petitioner. The respondent erred in treating zero-rated export supplies as exempt supplies and consequently proposed Rule 42 reversal contrary to Section 16 of the IGST Act and CBIC Circular No. 45/19/2018-GST.
GST cannot be levied on income", "other freight expenditure or trade creditors without first establishing the existence of a taxable supply under Section 7 of the Act. The ITC availed was supported by valid tax invoices and the alleged GSTR-2A/GSTR-2B differences arose due to supplier-side
reporting issues and reconciliation differences. The entire proceedings were uploaded only in the GST portal and no effective communication physical was served on the petitioner. Being unfamiliar with GST portal
operations,
the petitioner had entrusted GST compliances and portal monitoring to a part-time accountant. The accountant failed to inform the petitioner about the notices, hearing dates
and assessment proceedings. Consequently, the petitioner could not produce books of accounts, export records, invoices, reconciliation statements and other
supporting documents
before
the respondent. The impugned assessment
order
was therefore passed ex parte without
affording
an effective opportunity of hearing. 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; Since it is contented that the more than 50% of the disputed tax amount had been recovered from the petitioner, no additional condition is imposed.
In view of this, the writ petition is allowed on the following terms:- i. The impugned order dated 23.04.2025 is set aside and the matter is remanded back to the file of the respondent for reconsideration. ii. 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. 4 https://www.mhc.tn.gov.in/judis iii. Since the impugned order of assessment is set aside, any attachment of the bank account made pursuant to the impugned order shall stand raised. iv. No costs. Consequently, the connected miscellaneous petition shall stand closed. 24.06.2026 NCC:Yes/No rgm To The State Tax Officer, Lalgudi Assessment Circle, Commercial Taxes Buildings, Lalgudi. Trichy. 5 https://www.mhc.tn.gov.in/judis D.BHARATHA CHAKRAVARTHY
, J.
rgm and W.M.P(MD)No.13073 of 2026 24.06.2026 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.