Tvl.Thangam Store vs. The Deputy State Tax Officer-1

Facts

The petitioner, Tvl. Thangam Store, represented by its proprietor, filed a writ petition challenging an assessment order dated 17.12.2025, passed by the Deputy State Tax Officer-1, Nanguneri Assessment Circle, under Section 73 of the TNGST Act 2017 for the assessment year 2021-22. The assessment was made ex parte because the petitioner failed to utilize the opportunities provided. The impugned order disallowed the exemption claimed on outward supply of rice, treating the entire reported exempt turnover as taxable. The petitioner contended that the rice turnover is a primary agricultural produce exempt under Notification No. 2/2017-CTR and that the denial of exemption was based on assumption without verification. The petitioner also explained their non-appearance as a bona fide lapse due to reliance on a part-time accountant who failed to inform them about notices and hearings.

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 that the commodity in question, rice, is exempted from GST. Therefore, an opportunity was granted to the petitioner assessee without any condition. The impugned order dated 17.12.2025 was set aside and the matter was remanded back to the respondent. The assessee was directed to appear before the respondent, submit their reply and supporting documents, and the respondent was to 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 Court expressly left undecided any issues pertaining to the merits of the exemption claim itself, focusing solely on the procedural fairness.

Key Issues

1. Whether the ex parte assessment order dated 17.12.2025, passed under Section 73 of the TNGST Act 2017, is valid, considering the petitioner's explanation for non-appearance and the merits of their claim regarding the exemption of rice turnover. Petitioner's arguments: The petitioner argued that the assessment order is cryptic, non-speaking, illegal, arbitrary, and without jurisdiction. They contended that the denial of exemption for rice turnover, which they claim is a primary agricultural produce exempt under Notification No. 2/2017-CTR, was made without proper verification of invoices, stock records, or the nature of goods. They further argued that their absence from the proceedings was due to a bona fide lapse caused by a part-time accountant, and thus, an opportunity should be granted to present their case. Respondent's arguments: The respondent argued that the assessment order was made ex parte because the petitioner did not utilize the opportunities provided. The judgment does not record any specific arguments from the respondent beyond this procedural aspect.