Facts of the Case:

In this case, the impugned order determined tax, interest and penalty on the ground of discrepancies in turnover adjustments, as different figures were reported by the petitioner in GSTR-9 and GSTR-9C. Prior to the assessment, a show cause notice was issued pointing out the discrepancies. The petitioner appeared before the authorities and submitted replies along with the reconciliation statement in Form GSTR-9C. The petitioner contended that while computing the difference in turnover, the assessing authority committed two major errors: first, turnover pertaining to the petitioner’s Puducherry branch was wrongly included, and second, the auditor had reported the total turnover by including the GST component, which artificially inflated the turnover figure.

It was argued that under the statutory definition of “turnover” under the TNGST Act, the tax component cannot form part of turnover. If the GST element was excluded, the difference would shrink substantially and only a minor variance of ₹20 lakh would remain.

The Revenue contended that the petitioner had not specifically raised the issue of exclusion of the tax component in reply to the show cause notice and that the plea was being raised for the first time before the High Court to avoid the statutory pre-deposit requirement for filing an appeal.

Issue:

Whether the assessment order passed under Section 73 of the TNGST Act required interference where the assessee contended that turnover was wrongly computed by including the GST component, leading to inflated tax liability.

Held that:

The High Court held that the petitioner’s contention could not be brushed aside on the ground that it was raised belatedly. Since the assessing authority itself had examined the issue in the impugned order, it was not open to the Revenue to argue that the plea was an afterthought to avoid pre-deposit. The Court observed that if the tax component was wrongly included in turnover, it would inflate taxable value and could result in double taxation, offending settled principles of fiscal law.

Considering the nature of the dispute and the need for factual verification, the Court held that the matter required fresh consideration by the assessing authority. Accordingly, the impugned assessment order was set aside. 

This decision reiterates that turnover under GST law cannot ordinarily include the tax component, and erroneous inclusion may materially distort tax liability. Where reconciliation disputes arise from statutory returns (GSTR-9 and GSTR-9C), assessing authorities must undertake a reasoned examination rather than summarily rejecting explanations. The ruling also clarifies that writ jurisdiction can be invoked despite availability of appellate remedy when adjudication suffers from inadequate consideration of material issues.

Case Name: Tvl Unique Multi Films Virudhunagar Pvt. Ltd. rep. by its Managing Director T. Muralidharan Versus The Commissioner of Commercial Taxes, The Asisstant Commissioner (ST), Madurai dated 11.02.2026

To read the complete judgement 2026 Taxo.online 637