Tvl. Epr Loganathan And Company vs. The Deputy State Tax Officer Ii

Facts

The petitioner, Tvl.EPR Loganathan and Company, filed a writ petition before the Madurai Bench of the Madras High Court challenging an ex-parte assessment order dated 11.03.2026, issued by the Deputy State Tax Officer-II, Palani. The assessment order, passed under Section 73 of the TNGST Act, 2017, was for the tax period 2020-21. The petitioner contended that the assessment was made ex-parte because they did not avail the opportunities provided due to their previous consultant leaving and a new one taking charge in March 2026, who then noticed the order on the portal. They also claimed there was no physical service of the proceedings. The discrepancy noted was between GSTR7 and GSTR3B returns, which the petitioner stated they were in a position to reconcile.

Held

The Court held that an opportunity should be granted to the petitioner to present their submissions and produce relevant supporting documents before the respondent assessing officer. The Court reasoned that considering the nature of the discrepancies, the explanation provided by the assessee, and the reason given for not availing the opportunity, it was equitable to grant a chance to the petitioner. The Court's ratio is that High Courts, in exercise of writ jurisdiction, can grant opportunities to assessees on equitable grounds, even if they have missed prior opportunities, provided certain conditions are met. The Court allowed the writ petition on the condition that the petitioner deposits 25% of the disputed tax amount within four weeks. Upon deposit, the impugned order would be set aside, and the matter remanded to the respondent for fresh consideration. Any bank account attachment made pursuant to the impugned order would also be raised.

Key Issues

1. Whether the Court should grant an opportunity to the petitioner to present their submissions and produce supporting documents, despite not availing the opportunities provided by the respondent, considering the circumstances explained. This issue turns on the principles of natural justice and equitable relief under Article 226 of the Constitution of India. Petitioner's arguments: The petitioner argued that the ex-parte assessment was due to circumstances beyond their control, specifically the change in their tax consultant and the lack of physical service of the proceedings. They asserted they could reconcile the discrepancies and sought an opportunity to present their case. Revenue's arguments: The judgment does not record any specific arguments made by the revenue. However, the fact that an ex-parte order was passed implies the revenue's position was that the petitioner failed to avail the opportunities provided.