The Madras High Court has set aside an ex parte GST assessment order arising from a mismatch between GSTR-3B and GSTR-2A returns.
The Court granted the taxpayer an opportunity to substantiate its Input Tax Credit (ITC) claim by following the procedure prescribed under the relevant CBIC Circular, thereby ensuring a fair chance to establish the eligibility of the claimed credit.
A writ petition has been filed by Tvl. VARS Enterprises. It contests an assessment order dated 14 November 2025 passed u/s 74 of the CGST Act, 2017.
The assessment had been completed ex parte after the taxpayer did not present in the proceedings initiated by the State Tax Officer.
Under the assessment order, the main discrepancy determined by the department was pertinent to the mismatch between the ITC claimed in GSTR-3B and the information shown in GSTR-2A.
As per the mismatch, the proceedings were initiated, and the impugned assessment order was issued ex parte.
The problem is covered under CBIC Circular No. 183/15/2022-GST, dated 27-12-2022, which specifies the method in which ITC mismatch cases are to be analysed and verified.
The applicant was preparing to submit a response along with supporting records and documents as per the circular if a fresh opportunity was provided.
The enterprise presents reasons for not participating in the assessment proceedings. Notices and orders had been uploaded on the GST portal only and were not brought to the attention of the business in any other way.
The applicant said before the court that its accountant did not notify it regarding the notices uploaded on the portal. As a consequence, the assessment proceedings were completed ex parte under section 74 of the Act.
Justice D. Bharatha Chakravarthy, after marking the explanation proposed by the taxpayer on merits. The court stated that, acknowledging the category of the dispute and the taxpayer’s readiness to provide supporting records under the CBIC circular, a chance must be provided to show its case before the assessing authority.
HC asked the applicant to deposit 25% of the disputed tax amount within 4 weeks from receipt of the web copy of the order. The impugned assessment order shall be overturned and shall be remanded for fresh consideration if the deposit is incurred.
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Also, the Bench ordered that any bank account attachment effected as per the impugned assessment order shall stand lifted once the assessment is overturned. Therefore, the writ petition was permitted, and the case was remanded for fresh adjudication.
| Case Title | Tvl. VARS Enterprises vs. The Assistant Commissioner (State Tax) |
| Case No. | W.P.(MD)No.14811 of 2026 and W.M.P(MD)No.11149 of 2026 |
| For Petitioner | Mr.A.Satheesh Murugan |
| For Respondent | Mr.R.Parthiban |
| Madras High Court | Read Order |
