Tvl. Rk Industries vs. Deputy State Tax Officer Ii
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The petitioner challenged an ex-parte assessment order passed by the respondent under Section 73 of the GST Act. The petitioner claimed the order was passed without proper notice and sufficient opportunity to present their case.
Held
The Court found merit in the petitioner's plea regarding lack of proper opportunity and granted a chance to present their case. The impugned order was set aside, and the matter was remanded for fresh assessment.
Key Issues
Whether the assessment order was passed in violation of principles of natural justice by denying a proper opportunity to the assessee. Whether the grounds for levying tax, late fees, interest, and penalty were sustainable.
Sections Cited
Section 73, Section 17(5)
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Before: and
This writ petition challenges the impugned order passed by the respondent in GSTIN:33AMLPR9728B2ZT/2021-2022 dated 15.11.2025 which is an assessment order passed under Section 73 of the GST Act 2017. 2.I have heard the learned counsel for the petitioner and the learned Additional Government Pleader representing the revenue. 3.By the impugned order, the assessment was made ex-parte because the petitioner did not utilise the opportunities provided. The discrepancies and grounds on which the assessment order was issued, the dealer's explanation on merits, and the reasons for not participating in the assessment proceedings are summarised briefly and presented in a table below: 2/6 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 1.Rate of Tax of supplies made to TDS deductors: 18% tax levied by the proper officer on the goods supplied by the assessee to ISRO Propulsion Complex The proper Officer has levied higher rate of tax at 18% instead of reduced rate of tax at 5% as per Notification No.45/2017, Central
Tax,
dated 14.11.2017
and the assessee is taking all steps to obtain
relevant certificate from ISRO propulsion Complex, but without serving physical notice and also without granting sufficient time to produce the required certificate, the proper officer has passed the impugned order by levying higher rate of tax, which is highly unjustified and not sustainable in law. No physical notice is served and the impugned notice/order is uploaded only in the GSTN common portal and thus due to no knowledge about the issuance of notice by the proper officer, not ale to file reply. 2.Ineligible ITC u/s 17(5) of the GST Act, 2017: ITC claimed on insurance, precious meals, iron and steel and paint, which is blocked Assessee claimed only the eligible ITC on their inward supply of goods, which is used in the course/furtherance
of business and so Section 17(5) of the GST Act, 2017 cannot be invoked. Thus, without serving physical notice and also without granting sufficient time to produce the required supporting documents, the proper officer has passed the impugned order, which is highly unjustified and not sustainable in law. -do- 3/6 https://www.mhc.tn.gov.in/judis
GSTR-1 Late Fees: Proper officer has levied GSTR-1 late fees for belated filing of GSTR-1 return Assessee claimed that GSTR-1 is not a return, but only outward supply statement and hence no late fee is leviable and moreover, since they paid tax through GSTR-3B along with required late fees, mere non-filing of GSTR-1 in time which do not involve with any revenue impact, there is no revenue loss and hence, the late fee in this regard is not correct. -do- 4.Interest and penalty: The proper officer has levied
consequential interest and penalty. Since the tax demanded itself is not sustainable as stated
above,
the consequential interest and penalty levied is also liable to be quashed. -do- 4.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, an opportunity is granted to the petitioner assessee on the condition of depositing 25% of the disputed tax amount. 4/6 https://www.mhc.tn.gov.in/judis
In view thereof, the Writ Petition is allowed on the following terms: (i)Within a period of four weeks from the date of receipt of web copy of the order, the petitioner shall deposit 25% of the disputed tax amount with the respondent, without waiting for a certified copy of the order. (ii)Upon such deposit, the impugned order dated 15.11.2025 shall stand set aside, and the matter shall stand remanded back to the file of the respondent. (iii)The assessee shall appear before the respondent without fail and 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. (iv)Since the impugned order of assessment is set aside, any attachment of the bank account made pursuant to the impugned order shall raised. (v)No costs. Consequently, connected miscellaneous petition is closed.
NCC :Yes / No 29.04.2026 5/6 https://www.mhc.tn.gov.in/judis D.BHARATHA CHAKRAVARTHY, J.
Ns To The Deputy State Tax Officer-II, Tiruchendur Circle, Commercial Tax Office Building, Tuticorin District.
and W.M.P.(MD)No.9997 of 2026 29.04.2026 6/6 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.