Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Mad) 50000

IN THE HIGH COURT OF JUDICATURE AT MADRAS
D. Bharatha Chakravarthy, J
Punitha Antony Store – Appellant
Versus
State Tax Officer – Respondent
W.P(MD)No.15240 of 2026 | W.M.P(MD)No.11414 of 2026

Advocates:
For the Appellants/Petitioners: N.Sudalai Muthu
For the Respondents: S.Vashik Ali

When a tax assessment order is challenged as cryptic or passed without adequate opportunity, particularly involving complex document reconciliation, the court may remand the matter for fresh assessment to ensure procedural fairness and accurate determination of tax liability.

Headnote:The petitioner challenged an assessment order passed under Section 74 of the TNGST Act, 2017, alleging that the order was cryptic and passed without opportunity. The petitioner contended that discrepancies, such as GSTR-2A vs GSTR-3B mismatches and turnovers involving loans and bank credits, were erroneously assessed without reconciliation. The petitioner explained that non-participation in proceedings was due to accounting issues and the proprietor's travel. The Court found that due to the discrepancies noted and the reasonable justifications provided for non-participation, an opportunity should be granted to the assessee to produce evidence. The main issue was whether the assessment order passed ex parte was sustainable despite the assessee's inability to reconcile accounts and present records. The Court reasoned that given the nature of the tax demand, which potentially included non-taxable bank receipts and overlapping ITC claims, justice requires a fair hearing. The ratio decidendi emphasizes that where valid explanations for previous non-participation are provided, and the tax liability computation appears to involve complex reconciliations of loans and advances, the matter must be remanded for proper adjudication. The final outcome is that the impugned assessment order is set aside, and the matter is remanded to the respondent for fresh consideration, with the direction to allow the petitioner to submit evidence and be heard.

Table of Content
1. assessment orders require proper reconciliation of discrepancies and fair opportunity for the taxpayer. (Para 1 , 2 , 3)
2. courts may remand matters for fresh adjudication when procedural fairness is not maintained. (Para 4 , 5)

Prayer: Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of CERTIORARIFIED MANDAMUS, to call for the records on the file of the respondent in GSTIN 33BAYPR8468J1ZL/2022-23 dated 05.02.2026 for the assessment year 2022-23 passed by the Respondent under section 74 of TNGST Act 2017 and to quash the same as cryptic, non-speaking, illegal, arbitrary, wholly without jurisdiction and direct the respondent to pass assessment order afresh after affording opportunity of being heard and pass such further or other orders as this Honble Court may deem fit and proper in the circumstances of the case and thus render justice.

ORDER

This writ petition challenges the impugned order dated 05.02.2026 which is an assessment order passed under Section 74 of the TNGST Act 2017 .

2. I have heard the learned counsel for the petitioner and the learned Government Standing Counsel representing the revenue.

3. By the impugned order, the assessment was made because the petitioner did not utilise the opportunities provided and not filed documentary evidence. 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
The respondent raised a demand of Rs. 1,44,97,172/-under Section 74 on the grounds of GSTR-2A vs GSTR-3B mismatch, GSTR-1 vs GSTR-3B mismatch, GSTR-8A versus P&L difference, non reversal of ITC on credit notes, bank receipt and differences interest liability. The same ITC and purchase figures were repeatedly classified as "Lesser Claim of ITC", "Excess Claim of ITC", "Purchase Difference" and turnover suppression. The respondent also relied upon GSTR-9 analysis and adopted figures without furnishing any reconciliation or working sheet.	Mainly the bank credits included loans, advances, financial assistance and other non-GST receipts which cannot be treated as taxable turnover. The demand is therefore based on overlapping computations, double reversal and non-verification of records rather than any actual suppression of taxable turnover. The very same ITC discrepancy has been duplicated under multiple labels, resulting in artificial inflation of tax demand and double taxation. Once the respondent himself records lesser availment of ITC, there cannot simultaneously be a finding of excess availment of ITC on the same transactions. The figures adopted from GSTR-9 are erroneous, unsupported by reconciliation and include Reverse Charge Mechanism transactions which cannot be treated as excess ITC. The allegation regarding credit notes is unsustainable since the ITC effect had already been auto-adjusted through the GST portal and a further reversal would amount to double reversal.	The petitioner had fully depended upon a part-time accountant due to lack of GST knowledge and absence of direct portal access. Upon receipt of notices, the petitioner was in the process of collecting voluminous records including purchase accounts, GSTR reconciliations, bank statements and books of accounts. Since the regular accountant was unavailable and the proprietor had to travel outside the station for a business purposes, written adjournment request dated 18.08.2025 was submitted seeking reasonable time to furnish a detailed reply. Without granting opportunity reconciliation effective for and production of records, the respondent proceeded to finalize the assessment mechanically.

4. Considering the nature of the discrepancies noted, the explanatio

Click Here to Read the rest of this document

2026 Supreme(Online)(Mad) 50000

IN THE HIGH COURT OF JUDICATURE AT MADRASD. Bharatha Chakravarthy, JPunitha Antony Store – AppellantVersusState Tax Officer – RespondentW.P(MD)No.15240 of 2026 | W.M.P(MD)No.11414 of 2026

When a tax assessment order is challenged as cryptic or passed without adequate opportunity, particularly involving complex document reconciliation, the court may remand the matter for fresh assessment to ensure procedural fairness and accurate determination of tax liability.

IN THE HIGH COURT OF JUDICATURE AT MADRAS
D. Bharatha Chakravarthy, J
Punitha Antony Store – Appellant
Versus
State Tax Officer – Respondent
W.P(MD)No.15240 of 2026 | W.M.P(MD)No.11414 of 2026