Madras HC Upholds GST Section 74 Notices, Dismisses Writ Petitions

Canon India Private Limited Vs State Tax Officer (Madras High Court)

The Madras High Court heard three writ petitions filed by the petitioner challenging Show Cause Notices in Form GST DRC-01 dated 13.07.2024 relating to the tax periods 2017-2018, 2018-2019 and 2019-2020.

The Court noted that these writ petitions had initially been heard along with a batch of matters challenging proceedings under Section 74 of the GST enactments. Subsequently, on the petitioner’s request, the matters were de-tagged for separate disposal in terms of the Division Bench decision in BASF Catalysts India Private Limited. The petitioner had also relied upon the decision of the Supreme Court in Collector of Central Excise H.M.M. Limited.

The petitioner submitted that separate show cause notices had also been issued for the assessment years 2020-2021, 2021-2022 and 2022-2023. By an interim order dated 06.08.2024, the Court had stayed the proceedings relating to the present tax periods while observing that, if proceedings under Section 74 were ultimately found unsustainable, action under Section 73 could still be taken for later assessment years. Subsequently, the writ petitions concerning the later years were closed after recording that the petitioner had submitted replies and directing the respondents to consider those objections and pass orders after granting a reasonable opportunity of hearing.