2026 (3) TMI 968 - HC - GST

Inclusion of tax component in turnover may trigger remand for fresh assessment; adjudicatory authority to re-examine evidence.

Whether the assessment under the TNGST Act is maintainable hinges on inclusion of the tax component and entries from a Puducherry branch in declared ... Validity of assessment order passed under Section 73 - Inclusion of tax component in turnover - double taxation - pre-deposit requirement - opportunity of hearing - discrepancy in adjustments of turnover while the petitioner had mentioned different amounts in GSTR 9 and GSTR 9C -​​​​​​​ remand for fresh consideration where material contention was considered by authority Inclusion of tax component in turnover and risk of double taxation - HELD THAT: - The Court noted that the assessing authority recorded and addressed the contention that the auditor had included the tax component in the turnover figure, and found that if the tax component is treated as turnover it would lead to double taxation. The authority had not expressly rejected this contention but proceeded to compute a total which the Court found required reconsideration. The Court held that the submission that the tax component should be excluded from turnover falls to be considered afresh by the authority because treating the tax component as turnover contrary to the statutory definition would be legally impermissible and could produce double taxation. [Paras 9, 10, 11] Assessment set aside to the extent it proceeded without appropriately considering exclusion of the tax component; matter remitted to the authority for fresh decision on this point. Pre-deposit requirement not a bar where issue was before the authority - HELD THAT: - The Court examined the record and observed that the contention regarding inclusion of the tax component was part of the assessment proceedings and was considered by the authority in the impugned order. Consequently the Court rejected the submission that the point was being raised for the first time solely to avoid the pre-deposit; the matter therefore required remand rather than being left to be raised for the first time on appeal. [Paras 6, 9, 10] Petitioner's contention cannot be treated as newly raised to avoid pre-deposit; matter remitted for fresh consideration by the authority. Final Conclusion: Writ petition allowed; the impugned assessment order is set aside and the matter is remitted to the assessing authority for fresh consideration after giving the petitioner an opportunity of hearing; petitioner to make the specified deposit to secure the remand. Issues: Whether the assessment order dated 22.12.2025 passed under Section 73 of the TNGST Act, 2017 is maintainable where the turnover appears to include the tax component and amounts from a Puducherry branch, and whether the matter requires reconsideration by the assessing Authority.Analysis: The impugned assessment records consideration of the petitioner's contention regarding inclusion of GST in the turnover figure and the Pondicherry branch entries and does not expressly reject that contention; the assessing Authority computed totals indicating a discrepancy but proceeded to dismiss the petitioner's claims in toto. The assessment raises the possibility that inclusion of the tax component in declared turnover may result in double taxation and therefore warrants fresh examination. The petitioner had responded to the show cause notice and supplied GSTR-9C and related replies before the Authority. The question concerning inclusion of the tax component was not shown to be a mere afterthought solely to avoid the appellate pre-deposit requirement and can be addressed by the Authority on reconsideration.Conclusion: The impugned order dated 22.12.2025 is set aside and the matter is remitted to the second respondent/Authority for fresh consideration; the petitioner shall deposit Rs.5,00,000 within four weeks from receipt of certified copy, upon which the Authority shall hear the petitioner afresh and decide the matter in accordance with law.