Tvl. Vars Enterprises vs. The State Tax Officer

Facts

The petitioner, Tvl. VARS Enterprises, represented by its partner A. Ramanathan, filed a writ petition challenging an assessment order dated 14.11.2025 passed by the Respondent, The State Tax Officer, Kamarajar Salai Assessment Circle, Madurai. The assessment order was passed ex parte under Section 74 of the CGST Act, 2017, due to the petitioner's non-participation in the proceedings. The petitioner contended that the notice and order were uploaded only on the GST portal, and their accountant failed to inform them, preventing timely action. The discrepancy noted was the difference between GSTR-3B and GSTR-2A, which the petitioner claimed was settled by Circular No. 183/15/2022-GST dated 27.12.2022.

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 discrepancies, the explanation provided by the assessee, and the reason given for not availing the opportunity. On equitable grounds, and under appropriate conditions, the Court decided to grant an opportunity to the petitioner. The condition imposed was the deposit of 25% of the disputed tax amount. Upon compliance with this condition, the impugned order dated 14.11.2025 would be set aside, and the matter would be remanded back to the respondent for fresh consideration. The assessee would then be required to appear before the respondent, submit their reply and documents, and the respondent would pass orders in accordance with the law. The Court also directed that any attachment of the bank account made pursuant to the impugned order would stand raised. The issue of the merits of the discrepancy between GSTR-3B and GSTR-2A, as per Circular No. 183/15/2022-GST, was not decided on merits but was to be considered afresh by the respondent.

Key Issues

1. Whether the ex parte assessment order passed under Section 74 of the CGST Act, 2017, is liable to be quashed on grounds of violation of the principles of natural justice, considering the petitioner's explanation for non-participation and the merits of the case? Petitioner's Arguments: The petitioner argued that the ex parte assessment order was illegal and in gross violation of the principles of natural justice. They contended that they did not receive proper intimation as the notice and order were uploaded only on the GST portal, and their accountant's failure to inform them led to their inability to respond within the stipulated time. Furthermore, they asserted that the issue of discrepancy between GSTR-3B and GSTR-2A was already settled as per Circular No. 183/15/2022-GST dated 27.12.2022, and they were prepared to file a reply along with connected records as per the said circular. Respondent's Arguments: The respondent argued that the assessment order was made ex parte because the petitioner did not utilize the opportunities provided to them.