M/S.Dhani Loans And Services Limited vs. The State Tax Officer

Facts

The petitioner, M/s. Dhani Loans and Services Limited, filed a writ petition challenging an order of assessment dated 19.04.2022 passed under Section 73 of the Tamil Nadu Goods and Services Act, 2017, by the State Tax Officer, Thanjavur-1 Assessment Circle. They also challenged a subsequent order dated 28.10.2025 passed by the Appellate Deputy Commissioner (St), Goods and Service Tax, which rejected their appeal as belated. The petitioner argued that they could not present their case effectively before the assessing authority regarding the reversal of entries prior to the show cause notice, which would have eliminated any tax liability. They also stated that the amount paid under Reverse Charge Mechanism (RCM) was considered, and there was no variation between GSTR2A and 3B.

Held

The Court held that the impugned orders, dated 19.04.2022 and 28.10.2025, were to be set aside. The Court reasoned that given the petitioner's submission that 100% of the disputed tax liability had already been recovered and that they could not adequately present their case regarding the reversal of entries, an opportunity should be granted to the petitioner to re-agitate the matter before the assessing authority. The Court found merit in the petitioner's claim that the tax liability would be nil if their explanations were considered. The Court directed the matter to be remanded back to the first respondent (State Tax Officer) for fresh consideration. The petitioner was granted two weeks from the date of receipt of the order to file additional replies and supporting documents. The first respondent was directed to consider the matter afresh in accordance with law. No costs were imposed.

Key Issues

1. Whether the impugned orders are cryptic, non-speaking, illegal, arbitrary, and without jurisdiction, warranting quashing under Article 226 of the Constitution of India? Petitioner's arguments: The petitioner contended that they were not afforded a proper opportunity to present their case before the assessing authority. They claimed that discrepancies noted in the show cause notice could have been explained by demonstrating the reversal of entries even before the notice was issued, which would have absolved them of any tax liability. They further argued that the amount paid under RCM was accounted for, and there was no mismatch between their GSTR2A and GSTR3B filings. Revenue's arguments: The judgment does not record any specific arguments made by the respondents (State Tax Officer and Appellate Deputy Commissioner).