Sakthi Ganapathy Tex Vs Deputy State Tax Officer-1 (Madras High Court)
Summary: The Madras High Court set aside an order dated 12.12.2025 passed under Section 73 of the TNGST Act, 2017, after noting that the order had been issued without hearing the petitioner and that the alleged breach appeared prima facie to be minor. The petitioner had challenged the order on the grounds of breach of principles of natural justice and that it had merely committed a minor breach. Referring to Section 126(1) of the applicable GST enactments, the petitioner contended that the alleged breach fell within the scope of a minor breach and that a disproportionate penalty was being imposed merely because Section 73(9) prescribed a minimum penalty.
The petitioner, without prejudice, agreed to remit the entire tax demand as a condition for remand. The Court observed that, on comparison of Section 74(1) and Section 73(9), no minimum sum was prescribed in Section 74(1), whereas a minimum of Rs.10,000/- was fixed in Section 73(9). Although this could form the basis of a constitutional challenge, interference on that ground was not warranted in the absence of such a challenge.
Nevertheless, considering the absence of hearing and the prima facie minor nature of the breach, the Court directed that, subject to the petitioner remitting the tax demand within thirty days from receipt of the order, the impugned order would stand set aside and the matter would be remanded for reconsideration. A reasonable opportunity was directed to be provided and a fresh order was required within five months from the remittance. Subject to fulfilment of the condition, any bank attachment relating to the impugned order was also directed to be raised.
