Facts of the Case:

The petitioner challenged an ex parte Assessment Order dated 09.04.2025 passed by the respondent under Section 74, for the Assessment Year 2024–2025. The petitioner contended that he was unaware of the show cause notice, as multiple notices were uploaded on the GST portal, leading to confusion and failure to submit a reply. It was only upon receipt of the assessment order that the petitioner became aware of the proceedings.

The principal contention raised was that, with effect from 01.04.2024, proceedings relating to determination of tax for the relevant period could be initiated only under newly introduced Section 74A, and not under Sections 73 or 74. Therefore, the issuance of show cause notice and passing of the assessment order under Section 74 for FY 2024–25 was without jurisdiction.

Issue:

Whether proceedings for Assessment Year 2024–25 could be validly initiated under Section 74 of the TNGST Act, despite the introduction of Section 74A with effect from 01.04.2024, and whether the impugned assessment order passed under Section 74 was legally sustainable.

Held that:

The High Court held that from 01.04.2024 onwards, the respondent is empowered to initiate proceedings only under Section 74A of the Act, and not under Sections 73 or 74. Since the show cause notice and the consequent assessment order for FY 2024–25 were admittedly issued under Section 74, the respondent had acted without authority of law.

Accordingly, the impugned Assessment Order dated 09.04.2025 was set aside. However, the Court observed that a mere setting aside of the order would serve no useful purpose, as the respondent would otherwise be required to issue a fresh notice under Section 74A within the limitation period. To avoid multiplicity of proceedings and unnecessary delay, the Court adopted a pragmatic approach. The respondent was directed to thereafter pass a fresh order on merits, after affording sufficient opportunity of personal hearing, in accordance with law.

Case Name: Tvl. Fancy Agency, Represented by its Proprietor M. Mohammed Ayub Versus The Deputy State Tax Officer-I, Virudhunagar. Dated 10.12.2025

To read the complete judgement 2025 Taxo.online 3550