SRK Traders Vs State Tax Officer Adjudication/Legal Office of the Joint commissioner (ST) (Madras High Court)
The Madras High Court disposed of writ petitions challenging orders passed under Section 74A of the GST Act on 18.11.2025 for the tax period 2025-26. The petitioners contended that their replies to the DRC-01 show cause notices had not been considered in the impugned orders, resulting in a violation of the principles of natural justice. They also argued that the tax demands confirmed in the final orders exceeded the amounts proposed in the show cause notices, contrary to Section 75(7) of the GST Act.
The Court noted that the petitioners had submitted replies to the show cause notices on 17.10.2025 and that further inspections were conducted on 10.11.2025 before the orders were passed on 18.11.2025. The allegations against the petitioners were that they had failed to produce documents substantiating the inward movement of goods to justify the availment and passing on of Input Tax Credit, leading to proceedings under Sections 122(1)(ii) and 122(1)(vii) of the GST enactment.
The Court also recorded that the petitioners’ GST registrations had been cancelled, subsequently revoked upon application, and that fresh notices proposing cancellation had again been issued.
During the hearing, the petitioners undertook to deposit 10% of the disputed tax demand. Recording this undertaking, the Court remitted the matters to the respondent for fresh adjudication on merits, subject to the petitioners depositing 10% of the disputed tax within thirty days.
