Tvl. Barani Enterprises vs. The Deputy State Tax Officer-2

Facts

The petitioner, Tvl. Barani Enterprises, represented by its Proprietor, D. Baskaran, filed a writ petition challenging an assessment order dated 16.12.2025, passed by the Deputy State Tax Officer-2, Tuticorin. The assessment order was made ex-parte because the petitioner did not utilize the opportunities provided. The discrepancy noted was the non-submission of supporting documents for the claim of exemption on outward supply of Palm Jaggery (HSN Code: 1702), which the petitioner claimed was fully exempted from GST as per Notification No.2/2017-Central Tax (Rate) dated 28.06.2017. The petitioner attributed their non-participation to the impugned order being uploaded on the GST Portal without their knowledge and their accountant not informing them. The petitioner sought to quash the order as illegal, without jurisdiction, and in gross violation of principles of natural justice.

Held

The Court held that an opportunity should be granted to the assessee to present their submissions and produce relevant supporting documents before the respondent assessing officer. The Court noted the nature of the claim of exemption, the explanation provided by the assessee, and the reason given for not availing the opportunity. Considering that the commodity in question is exempted from GST, the Court decided to grant an opportunity to the petitioner without any condition. The impugned order dated 16.12.2025 was set aside and the matter was remanded back to the respondent. The petitioner was directed to file a reply along with supporting documents for the claim of exemption within four weeks of receiving the web copy of the order. The assessee was also directed to appear before the respondent without fail. The Court further directed that any attachment of the bank account made pursuant to the impugned order shall stand raised. The ratio decidendi is that principles of natural justice must be followed, and where a genuine reason for non-participation is provided, especially concerning an exempted commodity, an opportunity to present evidence should be given.

Key Issues

1. Whether the ex-parte assessment order dated 16.12.2025, passed by the Deputy State Tax Officer-2, Tuticorin, is liable to be quashed on the grounds of violation of principles of natural justice and lack of jurisdiction? (Under Article 226 of the Constitution of India and Section 73 of the TNGST Act, 2017). Petitioner's Contentions: The petitioner argued that the assessment order was passed ex-parte without providing a proper opportunity to be heard and without considering their explanation regarding the exemption claimed on Palm Jaggery. They contended that the order was illegal and passed without jurisdiction due to the violation of natural justice principles. They relied on the fact that Palm Jaggery is an exempted commodity as per Notification No.2/2017-Central Tax (Rate) dated 28.06.2017. Revenue's Contentions: The revenue, represented by the Senior Standing Counsel, did not explicitly record arguments in the judgment. However, the impugned order itself indicates that the assessment was made ex-parte due to the petitioner's failure to utilize the provided opportunities.