M/S.City Markettings vs. The State Tax Officer
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Before: and
This writ petition challenges the impugned order dated 26.12.2025, which is an assessment order passed under Section 74 of the TNGST Act, 2017. 2. I have heard the learned counsel for the petitioner and the learned Additional Government Pleader representing the revenue.
By the impugned order, the assessment was made after considering the representation dated 16.04.2025 by requantifying the proposal. The discrepancies and grounds on which the assessment order was issued, the dealer’s explanation on merits, and the reasons for the assessment proceedings are summarized briefly and presented in a table below: 2 https://www.mhc.tn.gov.in/judis Discrepancies found/Grounds on which the order is passed Explanation offered by the Assessee on merits Explanation for not availing the opportunity I) Liability on un-reconciled payment of ITC declared
in GSTR-9 As far as the alleged discrepancy of liability on unreconciled payment of ITC declared in form GSTR 09 return, he had claimed un- reconciled ITC in the form GSTR 9. The reported amount of un-reconciled ITC is due to the difference in tax reported in form GSTR 3B to that of form GSTR 2A filed by suppliers. In that amount some supplier invoices were not reflected the form GSTR2A return, and also some of the suppliers had issued the credit Note after filing of relevant monthly returns. If the same had been considered there will be no variation. The respondent had not considered the explanation judicially. Since, there was an excess claim of ITC, the demand was confirmed. 3 https://www.mhc.tn.gov.in/judis ii) ITC not reversed
for Credit
Notes received from the Suppliers As far as the allegation of ITC not reversed for credit notes received from suppliers, he had received the credit note from the supplier, but by inadvertent mistake he had not shown the same in form GSTR 3B, in the reverse credit column, but he had deducted the reverse credit note in the total ITC and shown the same in form GSTR3B return. Some credit notes amounts were not deducted because they had been given after filing of relevant returns and that was the reason for the difference between form GSTR 3B versus 2A return. Short
reversal
was confirmed. iii) Liability on RCM tax not paid for lorry expenses shown in P & L Account As far as the allegation of non payment of tax under RCM against lorry expenses, the lorry freight paid by him was below Rs.750 for a single transaction. Under GST, services provided by Goods Transport Agency (GTA) for a single consignee a not exceeding ?750 were exempted from tax. No details of payment made had been furnished and hence demand confirmed iv) Penalty under Section 74 and interest under Section 50 of the GST Act In the absence of any fraud, wilful
suppression, misstatement and wrong claim, the question of levy of interest under section 50 and penalty under section 74 of the GST act does not arise to the facts of this case. 4 https://www.mhc.tn.gov.in/judis
Considering the nature of the discrepancies noted, the explanation provided by the assessee and the reason given before this Court for not availing the opportunity, I believe that an opportunity can be granted to the assessee to present their submissions and produce the relevant supporting documents before the respondent assessing officer. This Court has been extending such opportunities on equitable grounds; however, under appropriate conditions. Therefore, normally, an opportunity is granted to the petitioner assessee on the condition of depositing 25% of the disputed tax amount.
In view of this, the writ petition is allowed on the following terms:- i. Since 100% towards demand of IGST, CGST and SGST amount has already been recovered, the impugned order dated 26.12.2025 shall stand set aside, and the matter shall stand remanded back to the file of the respondent. ii. The assessee shall appear before the respondent within four weeks of receiving the web copy of the order without fail and 5 https://www.mhc.tn.gov.in/judis submit their reply and documents in support of their claim, and it is for the respondent to consider the matter afresh and pass orders in accordance with law. iii. Since the impugned order of assessment is set aside, any attachment of the bank account made pursuant to the impugned order shall stand raised. iv. No costs. Consequently the connected miscellaneous petition shall stand closed. 30.04.2026 Neutral Citation: No rgm 6 https://www.mhc.tn.gov.in/judis To The State Tax Officer, Palakkarai Assessment Circle Commercial Tax Buildings Trichy-1. 7 https://www.mhc.tn.gov.in/judis D.BHARATHA CHAKRAVARTHY
, J.
rgm and W.M.P(MD)No.10369 of 2026 30.04.2026 8 https://www.mhc.tn.gov.in/judis
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.