Tvl Sri Ram Automobiles vs. The Deputy State Tax Officer-I

Facts

The petitioner, Tvl.Sri Ram Automobiles, represented by its Proprietor, filed a writ petition challenging an order passed by the Deputy State Tax Officer-1, Uthamapalayam. The impugned order, dated 26.02.2025, was an assessment order passed under Section 73 of the TNGST Act, 2017. The assessment was made ex parte because the petitioner did not utilize the opportunities provided. The petitioner claimed that notices and the impugned order were only tendered through the portal, which they missed, leading to their non-participation. The grounds for the order included the disallowance of an exemption claim for outward supply of maize raw/unpossessed due to non-production of supporting documents.

Held

The Court held that an opportunity should be granted to the assessee to present their submissions and produce supporting documents. The Court noted that the assessment was made ex parte because the petitioner did not utilize the opportunities provided, and the reason for non-participation was that notices were only received through the portal, which was left unnoticed. The Court found merit in the petitioner's explanation for not availing the opportunity and the explanation offered on merits regarding the exemption claim for outward supply of maize raw/unpossessed. Since the entire tax liability was stated to be paid, and only interest and penalty were questioned, the Court decided to set aside the impugned order and remand the matter back to the respondent. The ratio decidendi is that principles of natural justice require an opportunity to be heard, and if a party is prevented from doing so due to procedural issues like non-receipt of portal-based notices, a fresh opportunity should be granted, especially when the tax itself has been paid.

Key Issues

1. Whether the ex parte assessment order passed under Section 73 of the TNGST Act, 2017, is liable to be quashed for violation of principles of natural justice? Petitioner's arguments: The petitioner contended that the assessment order was passed ex parte due to non-receipt of notices, as all communications were made through the GST portal, which they missed. They argued that this procedural lapse violated the principles of natural justice, preventing them from presenting their case and supporting documents. They also stated that they had paid the entire tax liability, and only interest and penalty were in dispute. Respondent's arguments: The respondent argued that the assessment was made ex parte because the petitioner failed to utilize the opportunities provided. The judgment does not record specific arguments from the respondent regarding the procedural fairness or the merits of the exemption claim, beyond stating that the petitioner did not avail the opportunities.