Tvl. Hotel Shree Deiva vs. The Deputy State Tax Officer - 2

Facts

The petitioner, Tvl. Hotel Shree Deiva, represented by its Proprietor, R. Paulpandi, filed a writ petition before the Madurai Bench of the Madras High Court challenging an assessment order dated 20.12.2025, passed by the Deputy State Tax Officer – 2, Theni. The impugned order was passed under Section 73 of the TNGST Act, 2017, and assessed the petitioner for the period 2021-22. The assessment was made ex parte because the petitioner did not utilize the opportunities provided. The petitioner contended that notices were only uploaded on the online portal and not communicated through other modes, leading to their lack of awareness and inability to file a reply. The respondent levied tax, interest, and penalty through the impugned order.

Held

The Court held that an opportunity should be granted to the assessee to present their submissions and produce supporting documents before the respondent assessing officer, considering the nature of the discrepancies, the explanation provided by the assessee, and the reasons given for not availing the opportunity. The Court decided to grant this opportunity on equitable grounds, subject to certain conditions. The impugned order dated 20.12.2025 was set aside, and the matter was remanded back to the respondent. The Court directed the petitioner to deposit 25% of the disputed tax amount within four weeks. Upon deposit, the assessee must appear before the respondent, submit their reply and documents, and the respondent shall consider the matter afresh and pass orders in accordance with law. Any attachment of the bank account made pursuant to the impugned order was also ordered to be raised. The issue of whether the notices were properly served under Section 73 of the TNGST Act was implicitly addressed by granting a fresh opportunity, and the Court did not expressly leave any issue undecided.

Key Issues

1. Whether the ex parte assessment order passed by the respondent is liable to be quashed on the grounds that the petitioner was not properly served with notices, and the notices were only uploaded on the online portal without any other mode of communication, thereby violating principles of natural justice, as contemplated under Section 73 of the TNGST Act, 2017? Petitioner's Arguments: The petitioner argued that all notices were uploaded solely on the online portal and were not communicated through any other medium. Their auditor, who handled GST portal matters, did not inform them, and they themselves faced technical difficulties in uploading replies. Consequently, they were unaware of the notices and could not file a reply, leading to the ex parte order. They relied on the principle of natural justice. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue. However, it notes that the assessment was made ex parte because the petitioner did not utilize the opportunities provided.