Facts of the Case:

The petitioner challenged an assessment order dated 29.12.2025 passed under Section 73 of the GST Act for the financial year 2021–22. The impugned order raised a substantial tax demand on multiple grounds, including mismatch between returns, alleged hypothetical supplies, and instances of double taxation.

The petitioner contended that a major portion of the tax demand was unsustainable. It was argued that the alleged mismatch relating to exempt and non-GST supplies was only due to discrepancies in monthly returns, whereas the annual return (GSTR-9) and reconciliation statement (GSTR-9C) showed no inconsistency. Also, certain tax demands were based on hypothetical transactions which never occurred. In some cases, the petitioner had already discharged tax liability, resulting in double taxation.

The Revenue, on the other hand, argued that the assessment order clearly recorded that the petitioner had failed to produce necessary documentary evidence to substantiate its claims. The petitioner rebutted this by asserting that all relevant documents had already been submitted, but were not considered by the authority.

Issue:

Whether an assessment order passed under Section 73 of the GST Act can be sustained where the demand is primarily based on alleged discrepancies (mismatch, hypothetical supplies, and double taxation), and the assessee claims to have already submitted supporting documentary evidence which was not considered by the assessing authority.

Held that:

The Court held that since the assessment order was primarily founded on the alleged failure of the petitioner to furnish supporting documents, and the petitioner asserted that such documents had indeed been submitted but were not considered, the matter warranted reconsideration. Instead of relegating the petitioner to the appellate remedy, the Court deemed it appropriate to set aside the impugned assessment order and remand the matter back to the original authority for fresh adjudication.

The authority was directed to re-examine all issues item-wise after affording the petitioner an opportunity to file additional submissions and supporting documents, and to pass a reasoned order in accordance with law. This approach was adopted in the interest of both justice and revenue, ensuring proper reconciliation of discrepancies before fastening tax liability.

Case name: Tvl. City Union Bank Limited Versus The Commercial Tax Officer, The Assistant Commissioner (ST) (FAC), Tamil Nadu dated 30.03.2026

To read the complete judgement 2026 Taxo.online 815