M/S. Velammal vs. The Deputy State Tax Officer 1
Original PDF →Facts
The petitioner challenged an ex-parte assessment order issued under Section 74 of the TNGST Act, 2017, due to alleged turnover mismatch and non-compliance. The petitioner claimed non-receipt of notices uploaded only on the web portal and cited a Supreme Court decision regarding Section 74 proceedings.
Held
The Court granted the petitioner an opportunity to present their case by setting aside the ex-parte order. This was conditioned on the petitioner depositing 25% of the disputed tax amount.
Key Issues
Whether the ex-parte assessment order was validly passed without proper opportunity to the assessee, and if the invocation of Section 74 was justified without establishing fraud or wilful misstatement.
Sections Cited
Section 74, Section 50
AI-generated summary — verify with the full judgment below
Before: and
This writ petition challenges the impugned order dated 19.08.2025, which is an assessment order passed under Section 74 of the TNGST Act, 2017. 1 https://www.mhc.tn.gov.in/judis
I have heard the learned counsel for the petitioner and the learned Additional Government Pleader appearing for the respondent. 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: Discrepancies found/grounds on which the order is passed Explanation offered by the Assessee on merits Explanation for not availing the opportunity (i)Turnover
mismatch between from GSTR-7 to that of GSTR 3B return As far as the discrepancy pointed out by the respondent, the petitioner submit that whatever work he had executed was properly reported and tax paid. Normally, the work executed to Government department would be reported in those years but the Government departments in most of the cases only on release of their funds report the transactions in their form GSTR 07 and pay the TDS tax @ 2%. That is the reason for the alleged variation. The part time accountant failed to notice the fact of issuing of the proceedings the respondent had only chosen to upload all the communication, summons, notices, and orders only on the web portal. Because of the above reasons, the petitioner was not able to access the web portal which resulted in the issuance of Ex-parte impugned order. 2 https://www.mhc.tn.gov.in/judis (ii)Penalty under Section 74 and interest under Section 50 of the GST Act For invocation of Section 74 of the GST Act, fraud, wilful misstatement or suppression of facts with an intent to evade tax, should be established. In this regard, reliance is placed on the decision of the Hon'ble Hon'ble Supreme Court stayed
the further proceedings arising out of a show cause notice issued under Section 74 of the Act. 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. 5.In view of this, 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 this order, the petitioner shall pay 25% of the disputed tax amount with 3 https://www.mhc.tn.gov.in/judis the respondent, without waiting for the certified copy of the order. (ii)Upon such deposit, the impugned order dated 19.08.2025 shall stand set aside and the matter shall stand remitted back to the file of the respondent. (iii)The assessee shall appear before the respondent without fail and submit their reply and produce their 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 stand raised. (ii)No costs. Consequently, connected miscellaneous petition is closed. 08.04.2026 NCC:Yes/No Ns To The Deputy State Tax Officer-1 Commercial Building Aruppukottai. 4 https://www.mhc.tn.gov.in/judis D.BHARATHA CHAKRAVARTHY, J. Ns and W.M.P(MD)No.7731 of 2026 08.04.2026 5 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.