BACKGROUNDNineteen writ petitions were filed by multiple petitioners — all engaged in the medical equipment supply business in Coimbatore — challenging assessment orders passed in Form GST DRC-07 under Section 74 of the respective GST enactments for tax periods ranging from 2020-2021 to 2024-2025. The Revenue, after investigation and inspection, found that the petitioners were part of an organised circular trading ring, wherein they billed each other without any actual movement of goods. The sole purpose was not to pass fake ITC to the end user but to artificially inflate their business turnover to create a creditworthy image before banks and obtain bank loans. The assessment orders recorded that 96% to 100% of the total purchase and sales turnover of the petitioners constituted circular trading transactions, with only 1% or less being genuine original transactions. CRUCIAL FACTSThe assessment orders in Form GST DRC-07 confirmed demands levying penalty under Section 122(1)(ii) — for issuing invoices without supply of goods — and Section 122(1)(vii) — for availing Input Tax Credit without actual receipt of goods. The total penalty imposed across all 19 petitions aggregated to approximately Rs.12.34 crores under Section 122(1)(vii) and Rs.13.67 crores under Section 122(1)(ii). The petitioners' primary legal argument before the High Court was that the maximum penalty imposable under Section 122(1) is Rs.10,000/- and the assessing officers had no authority to impose penalty equivalent to the ITC wrongly availed, as the doctrine of proportionality required the penalty to be commensurate with the gravity of the offence. They relied upon Supreme Court judgments in labour law and service law matters on the doctrine of proportionality. The Revenue countered that Section 122(1) uses the expression "whichever is higher" — Rs.10,000/- or the amount of tax evaded/ITC irregularly availed — leaving no discretion whatsoever to levy a lower amount. The Respondents further relied on the Supreme Court's ruling in Dharamendra Textile Processors on the mandatory nature of statutory penalties. COURT OBSERVATIONS (Verbatim — Crucial)On Circular Trading and the Petitioners' conduct:"The above table shows that the above tax payers are involved in circular trading and has 1% or less original transactions that too were done to portray themselves as genuine tax payers but that is not the case. The above tax payers just to boost up their turnover has billed themselves without any goods movement and their aim is not transfer fake ITC but to boost up their business turnover to get bank loans, to create an image that they are big players in this medical equipment supply business."On Section 122(1) — No discretion to levy Rs.10,000/- as minimum:"The language in Section 122(1) of the respective GST Enactments also does not give any discretion to the Assessing Officer to levy lesser of the amount i.e., Rs.10,000/- as the expression used is 'whichever is higher'.""The above decisions of the Hon'ble Supreme Court cannot be applied to the facts of the case specifically in the light of the language in Section 122(1) of the respective GST Enactments. The expression used in Section 122(1) is 'whichever is higher'."On inapplicability of Dharamendra Textile ratio to GST Section 122:"Section 11-AC of the Central Excise Act, 1944 which fell for consideration is the above-mentioned decision of the Hon'ble Supreme Court is different from Section 122 of the respective GST Enactments. The Hon'ble Supreme Court in Union of India Vs. Rajasthan Spinning and Weaving Mills, (2009) 13 SCC 448, has pointed out that the ratio was confined to Section 11-AC of the Central Excise Act, 1944 and no observations with regard to the several other statutory provisions that came up for consideration in that decision."On prima facie liability:"No doubt that the Petitioners have wrongly availed the Input Tax Credit and have apparently passed on the credit to boost up their respective turn overs with a view to take undue advantage of the system, prima facie they are liable to penalty under Section 122(1) of the respective GST Enactments."On availability of statutory remedy and writ jurisdiction:"The provisions of the respective GST Enactments contemplate an appellate remedy before the Appellate Authority under Section 107 of the respective GST Enactments and further appeal before GST Tribunal under Section 122 of the respective GST Enactments and thereafter remedy before the High Court. The finer aspects of law at best can be left to be decided by the Division Bench of this Court in its appellate jurisdiction under Section 117 of the respective GST Enactments which is in line with the Judgment of the Hon'ble Supreme Court in L.Chandrakumar Vs. Union of India and others, (1997) 3 SCC 261.""The Petitioner cannot short circuit the statutory mechanism prescribed by citing the decisions and the principle laid under the indirect tax enactments which have been subsumed into the respective GST Enactments."On pre-deposit waiver:"Since pre-deposit of huge penalty as prescribed under Section 107 of the respective GST Enactments will cause undue hardship to the respective Petitioners and make the appellate remedy illusory, pre-deposit of 10% of penalty under Section 107 of the respective GST Enactments is dispensed with at the time of filing the appeals before the Appellate Authority." FINAL VERDICTAll 19 writ petitions are dismissed. Liberty granted to petitioners to file appeals before the Appellate Authority under Section 107 within 30 days. The mandatory pre-deposit of 10% of penalty under Section 107 is waived in view of the large quantum of penalty, to prevent the appellate remedy from becoming illusory. Appellate Authority directed to decide the appeals preferably within 90 days.👎 THUMBS DOWN (Against Assessees — Writ dismissed; however significant relief granted by way of pre-deposit waiver)
Tvl. SAM Enterprises & Others vs. Commercial Tax Officer & Others 08-02-2026
BACKGROUNDNineteen writ petitions were filed by multiple petitioners — all engaged in the medical equipment supply business in Coimbatore — challenging assessment orders passed in Form GST DRC-07 under Section 74 of the respective GST enactments for tax periods ranging from 2020-2021 to 2024-2025. The Revenue, after investigation and inspection, found that the petitioners were part of an organised circular trading ring, wherein they billed each other without any actual movement of goods. The sole purpose was not to pass fake ITC to the end user but to artificially inflate their business turnover to create a creditworthy image before banks and obtain bank loans. The assessment orders recorded that 96% to 100% of the total purchase and sales turnover of the petitioners constituted circular trading transactions, with only 1% or less being genuine original transactions. CRUCIAL FACTSThe assessment orders in Form GST DRC-07 confirmed demands levying penalty under Section 122(1)(ii) — for issuing invoices without supply of goods — and Section 122(1)(vii) — for availing Input Tax Credit without actual receipt of goods. The total penalty imposed across all 19 petitions aggregated to approximately Rs.12.34 crores under Section 122(1)(vii) and Rs.13.67 crores under Section 122(1)(ii). The petitioners' primary legal argument before the High Court was that the maximum penalty imposable under Section 122(1) is Rs.10,000/- and the assessing officers had no authority to impose penalty equivalent to the ITC wrongly availed, as the doctrine of proportionality required the penalty to be commensurate with the gravity of the offence. They relied upon Supreme Court judgments in labour law and service law matters on the doctrine of proportionality. The Revenue countered that Section 122(1) uses the expression "whichever is higher" — Rs.10,000/- or the amount of tax evaded/ITC irregularly availed — leaving no discretion whatsoever to levy a lower amount. The Respondents further relied on the Supreme Court's ruling in Dharamendra Textile Processors on the mandatory nature of statutory penalties. COURT OBSERVATIONS (Verbatim — Crucial)On Circular Trading and the Petitioners' conduct:"The above table shows that the above tax payers are involved in circular trading and has 1% or less original transactions that too were done to portray themselves as genuine tax payers but that is not the case. The above tax payers just to boost up their turnover has billed themselves without any goods movement and their aim is not transfer fake ITC but to boost up their business turnover to get bank loans, to create an image that they are big players in this medical equipment supply business."On Section 122(1) — No discretion to levy Rs.10,000/- as minimum:"The language in Section 122(1) of the respective GST Enactments also does not give any discretion to the Assessing Officer to levy lesser of the amount i.e., Rs.10,000/- as the expression used is 'whichever is higher'.""The above decisions of the Hon'ble Supreme Court cannot be applied to the facts of the case specifically in the light of the language in Section 122(1) of the respective GST Enactments. The expression used in Section 122(1) is 'whichever is higher'."On inapplicability of Dharamendra Textile ratio to GST Section 122:"Section 11-AC of the Central Excise Act, 1944 which fell for consideration is the above-mentioned decision of the Hon'ble Supreme Court is different from Section 122 of the respective GST Enactments. The Hon'ble Supreme Court in Union of India Vs. Rajasthan Spinning and Weaving Mills, (2009) 13 SCC 448, has pointed out that the ratio was confined to Section 11-AC of the Central Excise Act, 1944 and no observations with regard to the several other statutory provisions that came up for consideration in that decision."On prima facie liability:"No doubt that the Petitioners have wrongly availed the Input Tax Credit and have apparently passed on the credit to boost up their respective turn overs with a view to take undue advantage of the system, prima facie they are liable to penalty under Section 122(1) of the respective GST Enactments."On availability of statutory remedy and writ jurisdiction:"The provisions of the respective GST Enactments contemplate an appellate remedy before the Appellate Authority under Section 107 of the respective GST Enactments and further appeal before GST Tribunal under Section 122 of the respective GST Enactments and thereafter remedy before the High Court. The finer aspects of law at best can be left to be decided by the Division Bench of this Court in its appellate jurisdiction under Section 117 of the respective GST Enactments which is in line with the Judgment of the Hon'ble Supreme Court in L.Chandrakumar Vs. Union of India and others, (1997) 3 SCC 261.""The Petitioner cannot short circuit the statutory mechanism prescribed by citing the decisions and the principle laid under the indirect tax enactments which have been subsumed into the respective GST Enactments."On pre-deposit waiver:"Since pre-deposit of huge penalty as prescribed under Section 107 of the respective GST Enactments will cause undue hardship to the respective Petitioners and make the appellate remedy illusory, pre-deposit of 10% of penalty under Section 107 of the respective GST Enactments is dispensed with at the time of filing the appeals before the Appellate Authority." FINAL VERDICTAll 19 writ petitions are dismissed. Liberty granted to petitioners to file appeals before the Appellate Authority under Section 107 within 30 days. The mandatory pre-deposit of 10% of penalty under Section 107 is waived in view of the large quantum of penalty, to prevent the appellate remedy from becoming illusory. Appellate Authority directed to decide the appeals preferably within 90 days.👎 THUMBS DOWN (Against Assessees — Writ dismissed; however significant relief granted by way of pre-deposit waiver)
The petitioners challenged assessment orders and show cause notices imposing late fee under Section 47 and penalty under Section 125 of GST Acts for delayed filing of returns. They sought benefit of Amnesty Notification No.07/2023-Central Tax dated 31.03.2023, which reduced/waived late fee for specified periods. Some petitioners had filed returns within the amnesty window, while others filed before or after the prescribed period. They contended that imposition of both late fee and general penalty was illegal and contrary to the scheme of the Act.Court Decision:The Court held that late fee under Section 47 is a specific penalty for delay in filing returns and once imposed, general penalty under Section 125 cannot be levied for the same default. Imposition of general penalty in addition to late fee was set aside as unsustainable. The Court upheld applicability of Amnesty Notification No.07/2023 (as amended) only to those who satisfied the conditions specified therein, including filing within the prescribed period. Relief was granted by directing re-computation of late fee in accordance with the notification wherever applicable and by quashing improper penalty components.Cases Referred:Tvl. Jainsons Castors and Industrial Products vs The Assistant Commissioner (ST), Nandanam, Chennai
Kandan Hardware Mart & Others vs The Assistant Commissioner (ST) & Others 02-01-2026
The petitioners challenged assessment orders and show cause notices imposing late fee under Section 47 and penalty under Section 125 of GST Acts for delayed filing of returns. They sought benefit of Amnesty Notification No.07/2023-Central Tax dated 31.03.2023, which reduced/waived late fee for specified periods. Some petitioners had filed returns within the amnesty window, while others filed before or after the prescribed period. They contended that imposition of both late fee and general penalty was illegal and contrary to the scheme of the Act.Court Decision:The Court held that late fee under Section 47 is a specific penalty for delay in filing returns and once imposed, general penalty under Section 125 cannot be levied for the same default. Imposition of general penalty in addition to late fee was set aside as unsustainable. The Court upheld applicability of Amnesty Notification No.07/2023 (as amended) only to those who satisfied the conditions specified therein, including filing within the prescribed period. Relief was granted by directing re-computation of late fee in accordance with the notification wherever applicable and by quashing improper penalty components.Cases Referred:Tvl. Jainsons Castors and Industrial Products vs The Assistant Commissioner (ST), Nandanam, Chennai
Facts:The petitioner challenged the show cause notice in Form GST DRC-01 dated 23.09.2025 issued under Section 73 of the GST enactments for the tax period 2021-2022. The challenge was mainly on the ground that an earlier intimation in Form DRC-01A dated 06.05.2025 and a show cause notice dated 29.05.2025 had already been issued for the same tax period, and therefore another show cause notice could not be issued.Court Decision:The High Court held that there is no bar under the GST enactments for issuance of multiple show cause notices for the same tax period if they relate to different discrepancies or subject matters. The Court observed that the earlier proceedings and the impugned show cause notice dealt with different issues except for a limited overlap relating to exempt supplies.The Court further held that the petitioner should submit a reply to the impugned show cause notice and raise all permissible defences before the adjudicating authority. Accordingly, the writ petition challenging the show cause notice was dismissed, with liberty granted to the petitioner to file a reply within 30 days and contest the proceedings on merits.Cases Referred by Court:Duncans Industries Ltd. vs. Commissioner of Central Excise, New DelhiSimplex Infrastructures Ltd. vs. Commissioner of Service Tax, KolkataAvery India Ltd. vs. Union of IndiaALM Industries Limited vs. Assistant Commissioner (AE) Central Goods and ServicesH.A. Shah and Co. vs. Commissioner of Income TaxCommissioner of Income Tax vs. Kelvinator of India Ltd.Workmen of Cochin Port Trust vs. Board of Trustees of the Cochin Port TrustSingh Enterprises vs. Commissioner of Central Excise, Jamshedpur
Radiant Cash Management Services Ltd. vs. Commercial Tax Officer 18-12-2025
Facts:The petitioner challenged the show cause notice in Form GST DRC-01 dated 23.09.2025 issued under Section 73 of the GST enactments for the tax period 2021-2022. The challenge was mainly on the ground that an earlier intimation in Form DRC-01A dated 06.05.2025 and a show cause notice dated 29.05.2025 had already been issued for the same tax period, and therefore another show cause notice could not be issued.Court Decision:The High Court held that there is no bar under the GST enactments for issuance of multiple show cause notices for the same tax period if they relate to different discrepancies or subject matters. The Court observed that the earlier proceedings and the impugned show cause notice dealt with different issues except for a limited overlap relating to exempt supplies.The Court further held that the petitioner should submit a reply to the impugned show cause notice and raise all permissible defences before the adjudicating authority. Accordingly, the writ petition challenging the show cause notice was dismissed, with liberty granted to the petitioner to file a reply within 30 days and contest the proceedings on merits.Cases Referred by Court:Duncans Industries Ltd. vs. Commissioner of Central Excise, New DelhiSimplex Infrastructures Ltd. vs. Commissioner of Service Tax, KolkataAvery India Ltd. vs. Union of IndiaALM Industries Limited vs. Assistant Commissioner (AE) Central Goods and ServicesH.A. Shah and Co. vs. Commissioner of Income TaxCommissioner of Income Tax vs. Kelvinator of India Ltd.Workmen of Cochin Port Trust vs. Board of Trustees of the Cochin Port TrustSingh Enterprises vs. Commissioner of Central Excise, Jamshedpur
Facts:The petitioner failed to file the annual return under Section 44 of the Tamil Nadu GST Act for the relevant period. The State Tax Officer passed an order dated 26.02.2025 levying late fee of ₹75,025 under CGST and ₹75,025 under SGST (₹1,50,050 total) under Section 47 and additionally imposed general penalty of ₹50,000 under Section 125. The petitioner challenged the order contending that once late fee is levied under Section 47, general penalty under Section 125 cannot be imposed and that the calculation of late fee was incorrect.Court Decision:The High Court held that Section 125 provides for general penalty only where no specific penalty is prescribed under the Act. Since the petitioner had already been subjected to late fee under Section 47 for failure to file the return, the levy of additional general penalty under Section 125 was not permissible. Accordingly, the general penalty of ₹50,000 was set aside.With respect to the late fee, the Court held that the authority had incorrectly calculated the amount by duplicating it for CGST and SGST. The Court modified the late fee and directed that the petitioner shall pay ₹37,512.50 under SGST and ₹37,512.50 under CGST, totalling ₹75,025. Upon payment of the modified late fee, the bank was directed to permit the petitioner to operate the bank account which had been frozen.Cases Referred by Court:Order in W.P. No. 36614 of 2024, dated 04.02.2025 (Madras High Court).
Tvl R.P.G. Traders vs. State Tax Officer & Anr. 12-12-2025
Facts:The petitioner failed to file the annual return under Section 44 of the Tamil Nadu GST Act for the relevant period. The State Tax Officer passed an order dated 26.02.2025 levying late fee of ₹75,025 under CGST and ₹75,025 under SGST (₹1,50,050 total) under Section 47 and additionally imposed general penalty of ₹50,000 under Section 125. The petitioner challenged the order contending that once late fee is levied under Section 47, general penalty under Section 125 cannot be imposed and that the calculation of late fee was incorrect.Court Decision:The High Court held that Section 125 provides for general penalty only where no specific penalty is prescribed under the Act. Since the petitioner had already been subjected to late fee under Section 47 for failure to file the return, the levy of additional general penalty under Section 125 was not permissible. Accordingly, the general penalty of ₹50,000 was set aside.With respect to the late fee, the Court held that the authority had incorrectly calculated the amount by duplicating it for CGST and SGST. The Court modified the late fee and directed that the petitioner shall pay ₹37,512.50 under SGST and ₹37,512.50 under CGST, totalling ₹75,025. Upon payment of the modified late fee, the bank was directed to permit the petitioner to operate the bank account which had been frozen.Cases Referred by Court:Order in W.P. No. 36614 of 2024, dated 04.02.2025 (Madras High Court).
Case Facts:The petitioner challenged a bank attachment notice issued for recovery of tax dues of a company in which he was a director. An assessment order had been passed against the company for the tax period 2018–19. The petitioner claimed resignation from the company and sought immunity under Section 89(1), submitting a representation to authorities. The company had separately challenged the assessment order, which was pending before the Court. Court Decision:The Court held that the issue of petitioner’s liability under Section 89 requires adjudication. It directed the authorities to treat the impugned attachment notice as a show cause notice and decide the matter after giving opportunity to the petitioner. The petitioner was directed to submit a detailed representation within 30 days, and the authority to pass orders within two months thereafter. The bank attachment was ordered to be lifted pending such adjudication, subject to conditions.
Subir Ghosh v. The Deputy Commissioner (ST) & Ors. 17-09-2025
Case Facts:The petitioner challenged a bank attachment notice issued for recovery of tax dues of a company in which he was a director. An assessment order had been passed against the company for the tax period 2018–19. The petitioner claimed resignation from the company and sought immunity under Section 89(1), submitting a representation to authorities. The company had separately challenged the assessment order, which was pending before the Court. Court Decision:The Court held that the issue of petitioner’s liability under Section 89 requires adjudication. It directed the authorities to treat the impugned attachment notice as a show cause notice and decide the matter after giving opportunity to the petitioner. The petitioner was directed to submit a detailed representation within 30 days, and the authority to pass orders within two months thereafter. The bank attachment was ordered to be lifted pending such adjudication, subject to conditions.
Facts:The petitioner, a registered assessee, was subjected to inspection and show cause notices were issued under Section 74 of the TNGST Act for FY 2020-21 and 2021-22. Orders in Form GST DRC-07 dated 28.02.2024 demanding tax, interest and penalty were passed. The petitioner contended that the orders were only uploaded on the GST portal and were not otherwise communicated, resulting in the lapse of the time limit for filing appeal under Section 107.Court Decision:The Court held that Section 107 provides that limitation for filing appeal runs from the date on which the order is “communicated” to the assessee. Section 169 deals with modes of “service”, but the expressions “served” and “communicated” are not synonymous. Mere uploading of the order on the GST portal does not amount to communication of the order to the assessee.Since the impugned orders had only been uploaded on the portal and were not communicated to the petitioner through other modes, the limitation period for filing appeal had not commenced. The Court directed the authority to communicate the impugned orders to the petitioner, after which the petitioner would be at liberty to file an appeal under Section 107. Until such communication, the orders could not be enforced. Cases Referred by Court:· Pandidorai Sethupathi Raja v. Superintendent of Central Tax, Nungambakkam Zone IV, Chennai Central Range, Chennai, 2022 SCC OnLine Mad 8986· Koduvayur Constructions v. Assistant Commissioner-Works Contract, Palakad, 2023 SCC OnLine Ker 11392· Ram Prasad Sharma v. Chief Commissioner, 2020 SCC OnLine MP 4650· New Hanumat Marbles v. State of Punjab, 2023 SCC OnLine P&H 7171· Dhanraj v. Vikram Singh, 2023 LiveLaw (SC) 456· Shahul Hameed v. CTO, Tuticorin-II (WP(MD) No.26481 of 2024)· Namasivaya Auto Cars v. The Deputy Sales Tax Officer-I, Korattur, 2025 (6) TMI 2027· Binod Traders v. Union of India, 2025 (6) TMI 251 (Patna High Court)· Raj International v. Commissioner (CGST), 2025 SCC OnLine Del 2707· A. Sanjeevi Naidu v. The Deputy Commercial Tax Officer, Kanchipuram, 1972 SCC OnLine Mad 347· R v. Secretary of State for the Home Department, (1994) 1 AC 530· NHAI v. Madhukar Kumar, (2022) 14 SCC 661· Techno Prints v. Chhattisgarh Textbook Corporation, 2025 INSC 236· Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill, (2012) 2 SCC 108· Lalaram Thekedar v. Union of India, Writ Tax No.2786 of 2025 (Allahabad High Court)
Sharp Tanks and Structurals Private Limited vs The Deputy Commissioner (GST) (Appeals) & Another 17-09-2025
Facts:The petitioner, a registered assessee, was subjected to inspection and show cause notices were issued under Section 74 of the TNGST Act for FY 2020-21 and 2021-22. Orders in Form GST DRC-07 dated 28.02.2024 demanding tax, interest and penalty were passed. The petitioner contended that the orders were only uploaded on the GST portal and were not otherwise communicated, resulting in the lapse of the time limit for filing appeal under Section 107.Court Decision:The Court held that Section 107 provides that limitation for filing appeal runs from the date on which the order is “communicated” to the assessee. Section 169 deals with modes of “service”, but the expressions “served” and “communicated” are not synonymous. Mere uploading of the order on the GST portal does not amount to communication of the order to the assessee.Since the impugned orders had only been uploaded on the portal and were not communicated to the petitioner through other modes, the limitation period for filing appeal had not commenced. The Court directed the authority to communicate the impugned orders to the petitioner, after which the petitioner would be at liberty to file an appeal under Section 107. Until such communication, the orders could not be enforced. Cases Referred by Court:· Pandidorai Sethupathi Raja v. Superintendent of Central Tax, Nungambakkam Zone IV, Chennai Central Range, Chennai, 2022 SCC OnLine Mad 8986· Koduvayur Constructions v. Assistant Commissioner-Works Contract, Palakad, 2023 SCC OnLine Ker 11392· Ram Prasad Sharma v. Chief Commissioner, 2020 SCC OnLine MP 4650· New Hanumat Marbles v. State of Punjab, 2023 SCC OnLine P&H 7171· Dhanraj v. Vikram Singh, 2023 LiveLaw (SC) 456· Shahul Hameed v. CTO, Tuticorin-II (WP(MD) No.26481 of 2024)· Namasivaya Auto Cars v. The Deputy Sales Tax Officer-I, Korattur, 2025 (6) TMI 2027· Binod Traders v. Union of India, 2025 (6) TMI 251 (Patna High Court)· Raj International v. Commissioner (CGST), 2025 SCC OnLine Del 2707· A. Sanjeevi Naidu v. The Deputy Commercial Tax Officer, Kanchipuram, 1972 SCC OnLine Mad 347· R v. Secretary of State for the Home Department, (1994) 1 AC 530· NHAI v. Madhukar Kumar, (2022) 14 SCC 661· Techno Prints v. Chhattisgarh Textbook Corporation, 2025 INSC 236· Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill, (2012) 2 SCC 108· Lalaram Thekedar v. Union of India, Writ Tax No.2786 of 2025 (Allahabad High Court)
Facts:The petitioner challenged Order-in-Original No.102/2025 dated 04.02.2025 confirming tax demand of ₹30,13,02,903 along with interest and penalty under Section 74 of the CGST/TNGST Act. The department had issued a single show cause notice and passed a single assessment order covering six financial years from 2017-18 to 2022-23. The petitioner contended that bunching of show cause notices for multiple financial years is contrary to Sections 73 and 74 of the GST Act.Court Decision:The Court held that under Sections 73 and 74 of the CGST Act, issuance of show cause notice must be based on the “tax period”, which is linked to the return filed by the assessee. If notice is issued based on annual returns, it can cover the relevant financial year but cannot extend beyond that financial year.The Court observed that the limitation under Sections 73(10) and 74(10) is calculated separately for each financial year from the due date of filing annual return. Since each financial year constitutes a distinct tax period with separate limitation, clubbing multiple financial years in a single show cause notice and passing a composite assessment order is impermissible in law.Accordingly, the Court held that issuance of a composite show cause notice and passing of a single order for multiple financial years amounts to jurisdictional overreach. The impugned order dated 04.02.2025 was quashed on the ground that clubbing of financial years is not permissible under the GST Act.Cases Referred by Court:· Titan Company Ltd. v. Joint Commissioner of GST & Central Excise, (2024) 15 Centax 118 (Madras High Court)· State of Jammu and Kashmir and Others v. Caltex (India) Ltd., AIR 1966 SC 1350· Tharayil Medicals (Division Bench, Kerala High Court)· Deputy Commissioner of Intelligence v. Minimol Sabu, W.A. No.238 of 2025 (Kerala High Court)
R A and Co. vs The Additional Commissioner of Central Taxes 21-07-2025
Facts:The petitioner challenged Order-in-Original No.102/2025 dated 04.02.2025 confirming tax demand of ₹30,13,02,903 along with interest and penalty under Section 74 of the CGST/TNGST Act. The department had issued a single show cause notice and passed a single assessment order covering six financial years from 2017-18 to 2022-23. The petitioner contended that bunching of show cause notices for multiple financial years is contrary to Sections 73 and 74 of the GST Act.Court Decision:The Court held that under Sections 73 and 74 of the CGST Act, issuance of show cause notice must be based on the “tax period”, which is linked to the return filed by the assessee. If notice is issued based on annual returns, it can cover the relevant financial year but cannot extend beyond that financial year.The Court observed that the limitation under Sections 73(10) and 74(10) is calculated separately for each financial year from the due date of filing annual return. Since each financial year constitutes a distinct tax period with separate limitation, clubbing multiple financial years in a single show cause notice and passing a composite assessment order is impermissible in law.Accordingly, the Court held that issuance of a composite show cause notice and passing of a single order for multiple financial years amounts to jurisdictional overreach. The impugned order dated 04.02.2025 was quashed on the ground that clubbing of financial years is not permissible under the GST Act.Cases Referred by Court:· Titan Company Ltd. v. Joint Commissioner of GST & Central Excise, (2024) 15 Centax 118 (Madras High Court)· State of Jammu and Kashmir and Others v. Caltex (India) Ltd., AIR 1966 SC 1350· Tharayil Medicals (Division Bench, Kerala High Court)· Deputy Commissioner of Intelligence v. Minimol Sabu, W.A. No.238 of 2025 (Kerala High Court)
BACKGROUNDThe petitioner, a proprietary firm, was subjected to GST proceedings for the tax period 2019-20 by the State Tax Officer, Arumbakkam Assessment Circle, Chennai. The respondent-authority uploaded all notices and communications solely on the GST online portal. The petitioner remained unaware of these notices and consequently could not file a reply within the stipulated time. Taking advantage of this lapse, the respondent passed a demand order dated 27.08.2024 under Section 73, along with a summary in Form GST DRC-07, without granting any opportunity of personal hearing. Further, the tax authority had already recovered more than 80% of the total disputed tax demand of Rs. 2,12,546/- from the petitioner's bank account through attachment. Aggrieved, the petitioner filed the present writ petition under Article 226 of the Constitution of India before the Madras High Court, challenging the impugned order on twin grounds: (i) contravention of the CGST/TNGST Act, 2017, and (ii) violation of principles of natural justice. COURT OBSERVATIONS (Verbatim)Para 7: "In the cases on hand, it is clear that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice since it is just and necessary to provide an opportunity to the petitioner to establish their case on merits." FINAL VERDICTThe impugned order dated 27.08.2024 was set aside and the matter was remanded to the State Tax Officer for fresh consideration. The petitioner was directed to file reply/objections with supporting documents within three weeks from receipt of the order. The respondent was directed to thereafter issue a 14-day clear notice fixing a personal hearing date and pass appropriate orders on merits, in accordance with law, as expeditiously as possible. No costs were awarded.👍 In favour of the Assessee
Tvl. Sam Enterprises v. State Tax Officer, 18-03-2025
BACKGROUNDThe petitioner, a proprietary firm, was subjected to GST proceedings for the tax period 2019-20 by the State Tax Officer, Arumbakkam Assessment Circle, Chennai. The respondent-authority uploaded all notices and communications solely on the GST online portal. The petitioner remained unaware of these notices and consequently could not file a reply within the stipulated time. Taking advantage of this lapse, the respondent passed a demand order dated 27.08.2024 under Section 73, along with a summary in Form GST DRC-07, without granting any opportunity of personal hearing. Further, the tax authority had already recovered more than 80% of the total disputed tax demand of Rs. 2,12,546/- from the petitioner's bank account through attachment. Aggrieved, the petitioner filed the present writ petition under Article 226 of the Constitution of India before the Madras High Court, challenging the impugned order on twin grounds: (i) contravention of the CGST/TNGST Act, 2017, and (ii) violation of principles of natural justice. COURT OBSERVATIONS (Verbatim)Para 7: "In the cases on hand, it is clear that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice since it is just and necessary to provide an opportunity to the petitioner to establish their case on merits." FINAL VERDICTThe impugned order dated 27.08.2024 was set aside and the matter was remanded to the State Tax Officer for fresh consideration. The petitioner was directed to file reply/objections with supporting documents within three weeks from receipt of the order. The respondent was directed to thereafter issue a 14-day clear notice fixing a personal hearing date and pass appropriate orders on merits, in accordance with law, as expeditiously as possible. No costs were awarded.👍 In favour of the Assessee
Facts:The petitioner challenged Order-in-Original No.04/2025-GST ADC dated 06.01.2025 and the consequential rectification order dated 30.04.2025 passed for the period July 2017 to March 2023. The petitioner contended that the department issued a single show cause notice and passed a single order covering multiple financial years, which is contrary to the scheme of the GST Act.Court Decision:The Court held that under the GST Act, show cause notices must be issued based on the “tax period”. Where the assessment is based on annual returns, the relevant tax period corresponds to the respective financial year.The Court relied on its earlier decision dated 21.07.2025 in a batch of cases holding that show cause notices cannot be clubbed for more than one financial year. Since the impugned order covered the period from July 2017 to March 2023 through a single proceeding, the action was held to be without jurisdiction.Accordingly, the Court quashed the assessment order dated 06.01.2025 and the rectification order dated 30.04.2025 and granted liberty to the department to initiate separate proceedings for each financial year in accordance with law.Cases Referred by Court: W.P. Nos.29716 of 2024 etc. batch (Madras High Court, Order dated 21.07.2025)
Instakart Services Private Limited vs The Additional Commissioner, Chennai South Commissionerate 22-02-2025
Facts:The petitioner challenged Order-in-Original No.04/2025-GST ADC dated 06.01.2025 and the consequential rectification order dated 30.04.2025 passed for the period July 2017 to March 2023. The petitioner contended that the department issued a single show cause notice and passed a single order covering multiple financial years, which is contrary to the scheme of the GST Act.Court Decision:The Court held that under the GST Act, show cause notices must be issued based on the “tax period”. Where the assessment is based on annual returns, the relevant tax period corresponds to the respective financial year.The Court relied on its earlier decision dated 21.07.2025 in a batch of cases holding that show cause notices cannot be clubbed for more than one financial year. Since the impugned order covered the period from July 2017 to March 2023 through a single proceeding, the action was held to be without jurisdiction.Accordingly, the Court quashed the assessment order dated 06.01.2025 and the rectification order dated 30.04.2025 and granted liberty to the department to initiate separate proceedings for each financial year in accordance with law.Cases Referred by Court: W.P. Nos.29716 of 2024 etc. batch (Madras High Court, Order dated 21.07.2025)
Facts :The petitioner challenged assessment orders on the ground that notices and orders were only uploaded on the GST portal without being served through other modes under Section 169 of the Act. It was contended that due to reliance on tax practitioners and lack of awareness, the petitioner did not receive effective notice. The petitioners argued that Section 169 should be interpreted to ensure compliance with principles of natural justice. The Department contended that portal service is valid and sufficient compliance.Court Decision:The Court held that Section 169 must be interpreted to ensure effective service of notice and compliance with natural justice. It ruled that modes under Section 169(1)(a) to (c) are alternative primary modes and must ordinarily be attempted, and only upon failure or impracticability, modes under clauses (d) to (f), including portal upload, can be resorted to. Mere uploading on the portal without attempting other modes is insufficient. The impugned assessment orders were set aside and matters remanded for fresh adjudication after giving opportunity to file objections and be heard.Cases Referred:M. Satyanarayana v. State of KarnatakaSingaravelar Spinning Mills (P) Ltd. v. State of Tamil NaduPandidorai Sethupathi Raja v. Superintendent of Central TaxPee Bee Enterprises v. Assistant CommissionerRam Prasad Sharma v. Chief CommissionerV.N.V. Builders Pvt. Ltd. v. State Tax Officer
Sahulhameed v. The Commercial Tax Officer, Tuticorin-II 06-01-2025
Facts :The petitioner challenged assessment orders on the ground that notices and orders were only uploaded on the GST portal without being served through other modes under Section 169 of the Act. It was contended that due to reliance on tax practitioners and lack of awareness, the petitioner did not receive effective notice. The petitioners argued that Section 169 should be interpreted to ensure compliance with principles of natural justice. The Department contended that portal service is valid and sufficient compliance.Court Decision:The Court held that Section 169 must be interpreted to ensure effective service of notice and compliance with natural justice. It ruled that modes under Section 169(1)(a) to (c) are alternative primary modes and must ordinarily be attempted, and only upon failure or impracticability, modes under clauses (d) to (f), including portal upload, can be resorted to. Mere uploading on the portal without attempting other modes is insufficient. The impugned assessment orders were set aside and matters remanded for fresh adjudication after giving opportunity to file objections and be heard.Cases Referred:M. Satyanarayana v. State of KarnatakaSingaravelar Spinning Mills (P) Ltd. v. State of Tamil NaduPandidorai Sethupathi Raja v. Superintendent of Central TaxPee Bee Enterprises v. Assistant CommissionerRam Prasad Sharma v. Chief CommissionerV.N.V. Builders Pvt. Ltd. v. State Tax Officer
