Goal Closures Vs State Tax Officer (Madras High Court)
The petitioner challenged a Prohibition Order dated 07.02.2024 in Form GST INS-03 and a Seizure Order dated 27.02.2024 in Form GST INS-02, issued following an inspection conducted under Section 67 of the GST enactments. During the inspection, specified goods were placed under restriction and handed over for safe custody with directions that they should not be dealt with without prior permission of the State Tax Officer.
The initial allegation against the petitioner was that Input Tax Credit (ITC) had been availed belatedly under Section 16(4) for the period from 2017-2018 to 2023-2024. Subsequently, a show cause notice was issued, culminating in an assessment order dated 03.12.2024 in Form GST DRC-07. This assessment order was challenged earlier, and by order dated 12.03.2025, the High Court quashed the assessment order to the extent it related to limitation under Section 16(4), holding that the claim fell within the extended period under Section 16(5).
In that earlier order, the Court restrained the department from initiating proceedings based on limitation, directed defreezing of bank accounts, and allowed refund or adjustment of any amounts collected. However, it also granted liberty to the department to proceed on other issues such as discrepancies or wrongful availment of ITC in accordance with law.
