Tvl. Pearl Enterprises vs. The Deputy State Tax Officer -1 (St)

This writ petition challenges the impugned order dated 24.04.2024 which is an assessment order passed under Section 73 of the GST Act 2017. 2.I have heard the learned counsel for the petitioner and the learned Additional Government Pleader representing the revenue. 3.By the impugned order, 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 2 https://www.mhc.tn.gov.in/judis proceedings are summarised briefly and presented in a table below: Discrepancies found/grounds on which the order is passed Explanation offered by the Assessee on merits Explanation for not availing the opportunity The respondent initially alleged (i)short payment of tax due to GSTR-1 vs GSTR-3B

mismatch, (ii)turnover difference based on GSTR-7, and (iii)excess availment of ITC baed on GSTR-3B vs GSTR-2A mismatch. After considering the petitioner's reply, the respondent accepted the explanations relating to GSTR-1 and GSTR-7 discrepancies and dropped those proposals. However, the respondent confirmed ITC demand of Rs.82,354/- (CGST) Rs.41,177/- and SGST Rs.41,177/-) solely on account of non-reflection of certain

invoices

in GSTR-2A Tax, interest and penalty were levied under Section 73of the TNGST Act. The assessment was completed ex-parte. The petitioner had already furnished a detailed reply during the DRC-01A stage explaining that the ITC was supported by genuine purchase invoices, books of accounts and ITC ledgers maintained in the ordinary course of business. The assessment year 2018-19 pertains to the initial GST implementation period when supplier-side

reporting deficiencies

and reconciliation issues were common.

Mere

non- reflection of invoices in GSTR-2A cannot be a grond to deny substantive ITC without verification of supplier and underlying transactions. The respondent failed to follow Circular No. 183/15/2022-GST

dated 27.12.2022 and did not undertake

supplier-wise verification. The petitioner had actively participated

in the proceedings

at the DRC-01A

stage

and submitted

a detailed explanation

with reconciliation particulars. However, subsequent show cause notices and hearing notices were uploaded only in the GST portal without effective

physical communication.

Being unfamiliar with GST portal operations, the petitioner had entrusted

GST compliance matters to a part-time accountant. The accountant failed to inform the petitioner about the subsequent proceedings and personal hearing notices. Consequently, the petitioner was deprived of an opportunity to furnish invoices,

supplier confirmations

and supporting records before the impugned exparte order came to be passed. 4.Considering the nature of the discrepancies noted, the explanation provided by the assessee and the reason given 3 https://www.mhc.tn.gov.in/judis 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. 5.In view thereof, the Writ Petition is allowed on the following terms: (i)Within a period of four weeks from the date of receipt of 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. (ii)Upon such deposit, the impugned order dated 24.04.2024 4 https://www.mhc.tn.gov.in/judis 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 raised. (v)No costs. Consequently, connected miscellaneous petition is closed. 18.06.2026 NCC:Yes/No Ns 5 https://www.mhc.tn.gov.in/judis To The Deputy State Tax Officer -1 (St), Ettayapuram Assessment Circle, Commercial Taxes Buildings, Kadalaiyur Road, Ettayapuram. D.BHARATHA CHAKRAVARTHY, J. Ns 6 https://www.mhc.tn.gov.in/judis and W.M.P(MD)No.12399 of 2026 18.06.2026 7 https://www.mhc.tn.gov.in/judis