Case Law Details
Tvl. Jeyam Agency Vs Deputy State Tax Officer (Madras High Court)
The Madras High Court heard a writ petition challenging an assessment order dated 17.12.2025 passed under Section 73 of the TNGST Act, 2017. The assessment had been completed ex parte as the petitioner failed to participate in the proceedings despite opportunities being provided.
The dispute related to the disallowance of exemption claimed on outward supplies, where the entire reported exempt turnover was treated as taxable. The petitioner contended that the turnover pertained to coconut, which is a primary agricultural produce exempt under Notification No. 2/2017-CTR, and therefore no tax was leviable. It was further submitted that tax had already been paid on taxable goods such as oil cake and that there was neither suppression nor misclassification of turnover. The petitioner also argued that the exemption was denied merely on assumptions without verification of invoices, stock records, or the nature of goods.
Regarding non-participation in the proceedings, the petitioner explained that reliance had been placed on a part-time accountant who failed to inform about notices and hearing dates. Due to this bona fide lapse, no reply was filed and no appearance was made, resulting in the ex parte assessment order.
After considering the discrepancies, the explanation offered on merits, and the reasons for failure to avail the opportunity, the Court held that the assessee should be granted an opportunity to present submissions and supporting documents before the assessing officer. The Court observed that such opportunities were being extended on equitable grounds, though subject to conditions.
Accordingly, the Court directed the petitioner to deposit 25% of the disputed tax amount within four weeks from receipt of the web copy of the order. Upon such deposit, the impugned assessment order would stand set aside and the matter remanded to the assessing officer for fresh consideration in accordance with law. The Court also directed the assessee to appear before the respondent and submit relevant replies and documents. Further, any bank account attachment made pursuant to the impugned order was ordered to be lifted. No costs were awarded, and the connected miscellaneous petition was closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This writ petition challenges the impugned order dated 17.12.2025 which is an assessment order passed under Section 73 of the
TNGST Act 2017.
2. I have heard the learned counsel for the petitioner and the learned Additional Government Pleader representing the revenue.
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 summarized 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 |
| Disallowance of exemption claimed on outward supply by treating the entire reported exempt turnover as taxable. | the turnover pertains to coconut, which is a primary agricultural produce exempt under Notification No.2/2017-CTR, and no tax is leviable. | Petitioner relied on a part-time accountant who failed to inform about notices and hearing.
Due to such bona fide lapse, no reply or appearance was made, resulting in an ex parte order. |
| Tax has already been duly discharged on taxable goods like oil cake, and there is no suppression or misclassification. The denial of exemption is based on mere assumption without verification of invoices, stock records or nature of goods, and is therefore unsustainable |
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 four weeks of receiving the web copy of the order, the petitioner shall deposit 25% of the disputed tax amount with the respondent, without waiting for a certified copy of the order.
ii. Upon such deposit, the impugned order dated 17.12.2025 shall stand set aside, and the matter shall stand remanded back to the file of the respondent.
iii. 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.
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.
v. No costs. Consequently the connected miscellaneous petition shall stand closed.
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