Case Law Details
Abarna Enterprises Vs Deputy State Tax Officer -1 (Madras High Court)
The Madras High Court disposed of two connected writ petitions arising from assessment orders passed for the same tax period, namely FY 2021–2022. The Court observed that two separate assessment orders had been issued against the same assessee for the same discrepancies and assessment year, which was impermissible. Accordingly, the assessment order dated 09.10.2025 was quashed, as the other order covered not only the same discrepancies but also an additional issue. The Court permitted the Department to proceed with determining the assessee’s liability under the surviving assessment order.
With respect to the second writ petition, the Court noted that the assessment order dated 18.12.2025 had been passed ex parte due to the assessee’s failure to participate in the proceedings. The discrepancies identified included mismatch in turnover between GSTR-3B and GSTR-1, excess claim of input tax credit compared to GSTR-2A, and late filing fees for GSTR-1. The assessee attributed these discrepancies to incorrect reporting by its consultant. As for non-participation, the assessee submitted that it was unaware of the show cause notice and subsequent reminders, as its GST registration had been cancelled prior to issuance, and notices were uploaded only on the GST portal without further communication.
Taking into account the nature of discrepancies, the explanations offered, and the reason for non-appearance, the Court held that an opportunity should be granted to the assessee to present its case. The Court also noted that 46% of the disputed tax amount had already been recovered. On equitable grounds, the Court set aside the assessment order dated 18.12.2025 and remanded the matter back to the assessing authority for fresh consideration. The assessee was directed to appear before the authority and submit replies along with supporting documents. The authority was directed to reconsider the matter and pass orders in accordance with law. Additionally, any bank account attachment made pursuant to the quashed order was directed to be lifted. Both writ petitions were thus allowed, and the connected miscellaneous petitions were closed without costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
These two writ petitions are connected and are therefore taken up for disposal by way of a common order.
2. Upon hearing the learned counsel on either side, I am satisfied that, in respect of the same tax period, namely, 2021-2022, both the impugned orders have been passed. Hence, there cannot be two orders covering the same discrepancies in respect of the same petitioner for the same assessment year.
3. In view thereof, the impugned order dated 09.10.2025, which is challenged in W.P.(MD)No.11353 of 2026, is quashed. This order is chosen to be quashed since, in the other impugned order, an additional discrepancy has also been taken into account apart from those covered in W.P.(MD) No.11353 of 2026.
4. Accordingly, W.P.(MD)No.11353 of 2026 stands allowed, and the impugned order dated 09.10.2025 stands quashed. However, the Department is at liberty to pursue the discrepancies and determine the liability of the assessee under the order impugned in W.P.(MD)No.11374 of 2026.
5. Insofar as W.P.(MD)No.11374 of 2026 is concerned, 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 |
| Alleged difference of turnover reported in Form GSTR-3B in comparison with Form GSTR-01 for the FY 2021-2022 to a tune of (CGST) Rs. 59,966/- and (SGST) Rs. 59,966/- totalling to a sum of Rs.1,19,933/-. | Wrong reporting by the Petitioner’s consultant. | Petitioner was unaware of the show cause notice vide Form DRC-01 dated 30.05.2024and subsequent reminders, as the petitioner’s GST Registration was cancelled prior to the issuance of the same and the same was uploaded on GST portal without any further means of intimation. |
| Alleged excess claim of ITC in Form GSTR- 3B in comparison with ITC reflected in Form GSTR-2Aby the Petitioner for the FY 2021-2022, to a tune of (IGST) Rs.3,40,729/-, (SGST) Rs.47,702/- and (CGST) Rs.47,702/- totalling to a sum of Rs.4,36,133/- along with interest and penalty. |
Wrong reporting by the Petitioner’s consultant. | Petitioner was unaware of the show cause notice vide Form DRC-01 dated 30.05.2024 and subsequent reminders, as the petitioner’s GST Registration was cancelled prior to the issuance of the same and the same was uploaded on GST portal without any further means of intimation |
| Alleged late fee for belated filing of Form GSTR-01 by the petitioner for the FY 2021-2022, to a tune of (CGST) Rs.3,350/- and (SGST)Rs.3,350/- totalling to a sum of Rs.6,700/-. | Wrong reporting by the Petitioner’s consultant. | Petitioner was unaware of the show cause notice vide Form DRC-01 dated30.05.2024 and subsequent reminders, as the petitioner’s GST Registration was cancelled prior to the issuance of the same and the same was uploaded on GST portal without any further means of intimation. |
6. 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 WE opportunities on equitable grounds. Further, in the present case, 46% of the disputed tax amount has already been recovered from the petitioner.
7. In view of above, W.P.(MD)No.11374 of 2026 is allowed on the following terms:-
(i) The impugned order dated 18.12.2025 shall stand set aside, and the matter shall stand remanded back to the file of the respondent.
(ii) 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.
(iii) Since the impugned order of assessment is set aside, any attachment of the bank account made pursuant to the impugned order shall stand raised.
No costs. Consequently, the connected Miscellaneous Petitions are closed.
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