Tvl. Bagavathiamman Magalir Sangam vs. The State Tax Officer

Facts

The petitioner, Tvl. Bagavathiamman Magalir Sangam, filed a writ petition challenging an assessment order dated 24.12.2025, passed by the respondent, The State Tax Officer, for the Assessment Year 2021-2022. The assessment order was made ex parte because the petitioner did not participate in the proceedings. The respondent alleged that the petitioner conducted business as an unregistered person despite being liable for registration and failed to file a reply. The petitioner contended that all notices, including DRC-01 and ASMT notices, were uploaded only on the online portal and were not communicated to them. Their auditor, who handled the GST portal, did not inform them, and they were unaware of the notices. The petitioner also cited technical difficulties in uploading replies to the portal. The impugned order levied tax, interest, and penalty.

Held

The Court held that an opportunity should be granted to the assessee to present their submissions and produce relevant documents before the respondent assessing officer. The Court reasoned that considering the nature of the discrepancies, the explanation provided by the assessee, and the reasons given for not availing the opportunity, it was equitable to grant a chance for them to be heard. The ratio decidendi is that if an assessee demonstrates a plausible reason for non-participation in assessment proceedings, and the revenue's action appears to have been taken without a full hearing, the court may grant relief on equitable grounds, subject to certain conditions. The Court allowed the writ petition on the condition that the petitioner deposits 25% of the disputed tax amount within four weeks. Upon deposit, the impugned order would be set aside, and the matter remanded to the respondent for fresh consideration. The Court also directed that any bank account attachment made pursuant to the impugned order would stand raised.

Key Issues

1. Whether the ex parte assessment order passed by the respondent is liable to be quashed on the grounds of non-communication of notices to the petitioner, as contemplated under Section 73 of the TNGST Act, 2017? Petitioner's arguments: The petitioner argued that the assessment order was passed without proper notice, as all communications were uploaded only to the online portal. They contended that neither they nor their auditor were adequately informed of the notices, leading to their inability to file a reply. They also highlighted technical issues faced when attempting to upload responses. The petitioner asserted that the respondent passed the order without considering any explanation from their side. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or State Tax Officer.