Ponni And Co vs. The Appellate Deputy Commissioner (GST)
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Before: and Dr.S.G.K,
This writ petition challenges the impugned order dated 04.12.2025, 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 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 proceedings are summarised briefly and presented in a table below:- 3 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 Tvl.
Ponni
&
Co
(GSTIN: 33JJFPK8309K1ZU), dealer doing business within the juri iction of Tuticorin-III Assessment Circle. On examination of the information furnished in this return under various heads and the information furnished in GSTR-01, GSTR-2A, GSTR-3B, EWB and other records available in this office, discrepancies various were noticed. The detailed list of the discrepancies is given below. Reconciliation of tax liability declared in E-way bill with GSTR-01: The tax liability declared in E-way bill on outward supplies is greater than the tax liability declared in GSTR- 01 (excluding turnover related to services). The difference in tax liability is proposed undeclared tax as as follows: Late fee calculation GSTR-1 late fee: You have belatedly filed GSTR-1 outward statement for the FY 2021-22. Hence you are liable to payment of late fee as per section 47 of TNGST/CGST Act, 2017. The GST department passed an order against me dated 04.12.2025 in order to pay an amount of tax value IGST an amount of Rs.2,47,277.00/- and CGST an amount of Rs.00/-and SGST an amount of Rs.00/- and total of IGST, CGST and SGST an amount of Rs. 2,47,277.00/- and levied interest in IGST an amount of Rs.1,69,016.00/- and CGST an amount of Rs. 0.00 and in SGST an amount of Rs. 0.00 and total of IGST, CGST and SGST an interest amount of Rs.1,69,016.00/- and levied penalty in IGST an amount of Rs.24,728.00/- and CGST an amount of Rs. 0.00 and in SGST an amount of Rs. 0.00/- and total of IGST, CGST and SGST an penalty amount of Rs.24,728.00/- and Fee in IGST an amount of Rs.0.00/- and CGST an amount of Rs.1,075.00/- and Fee in SGST an amount of Rs.1,075.00/- and total of IGST, CGST and SGST an Fee amount of Rs.2,150.00/- and others in IGST an amount of Rs.0.00 CGST an amount of Rs. 0.00 and in SGST an amount of Rs. 0.00 and total of IGST, CGST and SGST and others amount of Rs. 0.00/- and totaling of both IGST, CGST and SGST an amount of Rs. 4,43,171.00/- for the discrepancies found in the Tax period 2021-2022. 1. The impugned Best Judgment Assessment Order passed under Section 73 of the GST Act, 2017 is arbitrary, illegal and unsustainable in law.
M/s. Ponni & Co. was subjected to GST scrutiny for the financial year 2021-22. The department found that outward supplies reflected in E-Way Bills attracted an IGST liability of ?2,47,277, whereas no corresponding turnover was reported in GSTR-1. Show Cause Notices in Form DRC-01A and DRC-01, along with reminder notices and personal hearingopportunities, were issued. As no reply was filed and no appearance was made before the authority, the Deputy State Tax Officer confirmed the proposal under Section 73 of the GST Act and passed DRC-07, raising a total demand of ? 4,43,171 towards tax, interest, penalty, and late fee.
The assessing authority has proceeded ex parte without examining the nature of transactions covered under the E-Way Bills, such as stock transfers, cancelled transactions, returned goods, clerical errors, or other non- taxable movements. The order has been passed mechanically based on system- generated data without independent verification. It is further submitted that GST liability cannot be fastened merely on assumptions and presumptions arising out of E-Way Bill data. The burden lies upon the department to establish actual suppression of turnover through cogent evidence. The impugned order does not contain any invoice- wise verification or finding proving undisclosed taxable supplies.
The impugned order has been passed without application of mind andin violation of principles of natural justice.
Hence, the impugned order is liable to be set aside. The petitioner is unawar of all this GST departmental proceedings and the is communication entirely through online mode in GST portal and the petitioner don't have any knowledge
about
those proceedings and these short-paid tax and output mismatch not done purposefully were and it happened erroneously in the year of 2021-2022 as the GST portal is new to each and every tax payer. Being a regular tax payer, the petitioner did not evade tax purposefully and now the GST department have imposed a huge levy amount against the petitioner which the petitioner can't pay and this is a huge amount imposed against the petitioner which completely affect his entire business. 4 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. ii. Upon such deposit, the impugned order dated 04.12.2025 shall stand set aside, and the matter shall stand remanded back to the file of the respondent. 5 https://www.mhc.tn.gov.in/judis 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 are closed. 11.06.2026 Index: Yes Speaking Order: Yes Neutral Citation: No rgm 6 https://www.mhc.tn.gov.in/judis To 1. The Appellate Deputy Commissioner (GST), 4th floor, Commercial Taxes Building, Dr.S.G.K, S.Thangaraj Salai, Madurai- 625020, or Camp office at 1st floor Commercial Taxes Building, South High Ground Road, Palayamkottai, Tirunelveli – 627002. 2. The Deputy State Tax Officer – 2, Office of the State Tax Officer, Tuticorin-III, Assessment Circle, Tuticorin-III, No.282A, Commercial Taxes Building, North Beach Road, Thoothukudi - 628001. 7 https://www.mhc.tn.gov.in/judis D.BHARATHA CHAKRAVARTHY
, J.
rgm and W.M.P(MD)Nos.11770 and 11771 of 2026 11.06.2026 8 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.