2026 Supreme(Online)(Mad) 47909

IN THE HIGH COURT OF JUDICATURE AT MADRAS
D. Bharatha Chakravarthy, J
Vars Enterprises – Appellant
Versus
Assistant Commissioner (State Tax) – Respondent
W.M.P(MD)No.11143 of 2026

In the exercise of writ jurisdiction, the court may set aside an ex-parte assessment order passed due to the assessee's non-participation, provided the assessee is willing to undergo a conditional remand, such as the deposit of a portion of the disputed tax to ensure interests of justice and revenue.

Headnote:(A) Constitution of India - Article 226 - TNGST Act, 2017 - Section 73 - Writ Petition - Challenge to ex-parte assessment order - Petitioner seeking opportunity to be heard on merits - Court exercising equitable jurisdiction to set aside ex-parte order subject to conditions - Requirement of depositing 25% of disputed tax amount as a condition for remand - Principle of natural justice - Where a party fails to participate in initial proceedings, the court may grant a fresh opportunity subject to terms to ensure justice is served. (Paras 1, 3, 4)

(B) Writ Jurisdiction - Relief - Setting aside ex-parte orders - When an assessment order is passed ex-parte, the court may provide a conditional opportunity for the assessee to produce documents and provide explanations, subsequently setting aside the attachment of bank accounts upon compliance. (Paras 4, 5)

Facts of the case:
The petitioner challenged an ex-parte assessment order passed under the state tax statute for the tax period 2017-18, citing a violation of principles of natural justice. The petitioner had failed to utilize prior opportunities provided during the assessment proceedings.

Findings of Court:
The court observed that the principles of natural justice and equity warrant granting the petitioner a final opportunity to present evidence and submissions. To balance the interests of the revenue and the assessee, the court directed the petitioner to deposit a percentage of the disputed tax as a condition precedent for remanding the matter for fresh adjudication.

Issues: Whether the ex-parte assessment order should be set aside to allow the assessee a fresh opportunity for representation despite the assessee's prior failure to participate in the proceedings.

Ratio Decidendi: The court maintained that providing an opportunity to be heard is consistent with equitable principles, provided that the assessee demonstrates willingness to comply with conditions that protect the interest of the revenue, such as partial deposit of the disputed tax.

Result: Writ Petition allowed; impugned order set aside upon fulfillment of conditions; matter remanded for fresh consideration.

Table of Content
1. factual background and procedural history regarding the ex-parte assessment order. (Para 1 , 3)
2. court's discretion to grant remand based on conditional deposit of disputed tax. (Para 2 , 4)
3. final orders and terms for setting aside the assessment and remand. (Para 5)

ORDER

This writ petition challenges the impugned order dated 28.12.2023 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 Government Standing Counsel 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:

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 thereof, this Writ Petition is allowed on the following terms:

(i) Within four weeks from the date of receipt of a 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 28.12.2023 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 is closed.

04.06.2026 sji NCC: Yes/No To The Assistant Commissioner (State Tax), Kamarajar Salai Assessment Circle, Madurai.

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