Bharath Ready Mix Concrete Vs State Tax Officer (intelligence) (Madras High Court)
The Madras High Court disposed of a batch of writ petitions challenging assessment orders dated 26.11.2024 for tax periods from April 2020–March 2021 to April 2024–May 2024. These orders followed DRC-01 notices issued on 16.09.2024, a DRC-01A intimation issued on 05.08.2024, and a detailed reply filed by the petitioner on 15.10.2024. The proceedings stemmed from an inspection conducted on 10.05.2024 at the petitioner’s premises, during which records were seized.
The respondent concluded that the petitioner’s inward supply of cement, sand, and pebbles was disproportionate to its outward supply of ready-mix concrete. For this purpose, the respondent assumed a fixed input-output ratio of 2:1:3. The assessment orders stated that although the petitioner disputed this ratio and submitted certain grade-wise ratios, it allegedly failed to provide grade-wise output and material consumption details to establish actual production. Based on this, the respondent rejected the petitioner’s reply and confirmed the tax liability.
The Court noted that the department treated the alleged disproportionate inward supply as evidence of suppressed turnover in the petitioner’s GSTR-1, GSTR-3B, and GSTR-9C returns. However, it found that the respondent had produced no supporting material to establish suppression of outward supply or confirm that the inward supply recorded in returns did not match the petitioner’s actual production.
