Tvl Janaki Transport vs. The State Tax Officer (Inspection-1)/Commercial Tax Officer
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Cause title — parties, addresses and appearances
ORDER The Writ Petition is filed challenging the impugned order dated 17.12.2025. 2. The order is one passed under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017. Upon hearing the learned counsel for the petitioner and perusing the material records of the case, the impugned order is passed on the ground that the petitioner has reported nil turnover in the GSTR-1 and GSTR-3B filed by them. Upon inspection, it was found that there is a total turnover of Rs.8,58,56,506/-, which was not reported by the petitioner. Accordingly, a show cause notice was issued and the petitioner submitted a reply that there was no suppression and it was erroneously mentioned as 'nil return' because of the fact that the nature of the transaction is as per the reverse change mechanism and the liability is only on the person who purchased the services from the petitioner and therefore, by an error, they mentioned the turnover as 'nil', and there was no intention to suppress any information or short 2/7 https://www.mhc.tn.gov.in/judis payment of tax. According to the learned counsel for the petitioner, even the show cause notice did not contain any averment with reference to the wilful suppression or wilful short payment of tax. Therefore, the invocation of section 74 of the TNGST Act, 2017, is not justified.
Per contra, the learned Additional Government Pleader appearing on behalf of the respondent would submit that even if the transactions are covered by the reverse charge mechanism, the turnover should be reported. Otherwise, the entire turnover would escape. If the other person, namely, the purchaser of the suppliers, also did not report the transaction to the authorities, there will be revenue loss. The entire episode came to light only after inspection by the authorities. Therefore, Section 74 of the TNGST Act, 2017, has been rightly invoked and the impugned order has been passed. It is for the petitioner to have availed the opportunities when provided and the petitioner cannot complain before this Court when there is an alternative remedy of appeal that is available to the petitioner.
In reply thereof, the learned counsel for the petitioner would submit that it is not as if the entire episode came to light only by the inspection of the petitioner. The petitioner has filed Form GSTR-9, the reconciliation statement 3/7 https://www.mhc.tn.gov.in/judis by which all these transactions are duly reflected in the reconciliation statement and therefore, there is no wilful suppression.
I have considered the rival submissions made on either side and perused the material records of the case.
These are transactions which ought to have been disclosed in the returns as turnover. After disclosing, the petitioner ought to have claimed that the incidence of tax is on the other person on account of the reverse charge mechanism. It is an error committed by the petitioner in not showing or reflecting the transaction as 'nil' turnover. The next question is to determine whether the impression was wilful or was a mere error on the part of the petitioner. In this regard, now, before this Court, it is contended by the learned counsel for the petitioner that even before inspection, Form GSTR-9 reflected the said transactions in the reconciliation statements, as turnover.
However, on perusal of the impugned order, it can be seen that though the petitioner filed a reply, the petitioner did not avail the opportunity of personal hearing when granted to them. As rightly contended when a reasonable opportunity was provided, it is for the assessee to appear before the respondent 4/7 https://www.mhc.tn.gov.in/judis and place on record such materials that there was no any wilful suppression and that there was no incidence of tax on account of the reverse charge mechanism. I have considered the reasons for non-availing the opportunity of personal hearing and I am of the view that one more opportunity can be granted to the petitioner. Normally, this Court imposes the condition to deposit 25% while granting the opportunity on an equitable basis. However, since in this case it is submitted that there will not be any incidence of tax on account of the reverse charge mechanism, I am of the view that no such additional condition needs to be imposed in the instant case.
In view thereof, this Writ Petition is allowed on the following terms: (i) The impugned order dated 17.12.2025 as well as the summary of rectification/withdrawal order dated 09.02.2026 shall stand quashed and the matter is remanded back to the file of the respondent for fresh consideration; (ii) Within two weeks from the date of receipt of a web copy of the order, the petitioner shall file such additional reply and produce such document and avail the opportunity of personal 5/7 https://www.mhc.tn.gov.in/judis hearing and use the opportunity to place on record such materials before the respondent; (iii) It is for the respondent to consider the same afresh and pass orders in accordance with law. No costs. Consequently, connected miscellaneous petition is closed. 21.04.2026 sji NCC: Yes/No To The State Tax Officer (Inspection-1)/ Commercial Tax Officer, Commercial Tax Department, Office of the Joint Commissioner (CT)(IW), AR Line Road, Tirunelveli-627 002. 6/7 https://www.mhc.tn.gov.in/judis D.BHARATHA CHAKRAVARTHY, J. sji and W.M.P.(MD)No.8816 of 2026 21.04.2026 7/7 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.