Madras HC Remands Case as GST Authority Failed to Consider Relevant Subsequent Order

Ramasamy Gounder Prakasam Vs Joint Commissioner (Madras High Court)

The Madras High Court adjudicated a writ petition challenging an order passed under the Central Goods and Services Tax (CGST) Act and the Tamil Nadu Goods and Services Tax (TNGST) Act, confirming substantial tax demands, interest, and penalties against the petitioner for the period July 2017 to March 2021. The impugned order confirmed CGST and SGST demands of ₹1,18,44,675 each, along with interest and equivalent penalties for alleged suppression of taxable turnover. Partial payments made by the petitioner were appropriated against the liability.

The petitioner challenged the order primarily on the ground that the tax liability pertained to works contracts executed prior to the implementation of the GST regime on 01.07.2017. It was contended that although payments were received after the introduction of GST, the services themselves were rendered earlier and were therefore subject to the pre-GST regime, including Service Tax and VAT. The petitioner also argued that payments already made towards tax liability were not properly accounted for in the impugned order.

Further, the petitioner submitted that a State Authority had passed a separate assessment order for the tax period 2020–2021, which overlapped with the demand raised in the impugned order. It was pointed out that by a subsequent order dated 17.02.2025, the State Authority had dropped the demand for the same amount covered in the earlier show cause notice, thereby affecting the validity of the impugned order.