Tvl. Sahayarani Medicals Vs Assistant Commissioner (ST) (Madras High Court)
Summary: The Madras High Court considered a writ petition challenging an assessment order dated 30.12.2025 confirming GST demand along with interest and penalty. The petitioner, Tvl. Sahayarani Medicals, contended that it had remained under the composition scheme and was eligible to discharge tax at the compounded rate under Section 10 of the CGST Act, 2017. It relied upon Notification No. 02/2019-Central Tax dated 29.01.2019 to contend that the enhanced composition threshold was available from 01.02.2019.
The High Court rejected this contention. It observed that Notification No. 02/2019-Central Tax merely brought specified provisions of the CGST (Amendment) Act, 2018 into force from 01.02.2019. The actual enhancement of the turnover threshold for the composition scheme to ₹1.50 crore was implemented through Notification No. 14/2019-Central Tax dated 07.03.2019, which became effective only from 01.04.2019. Consequently, the petitioner could claim the benefit of the enhanced threshold only for the succeeding tax period commencing on 01.04.2019.
Although the Court found the writ petition devoid of merit on this contention, it took note of the petitioner’s undertaking to deposit 25% of the disputed tax and observed that the petitioner might have a case on merits regarding the ultimate tax liability. Accordingly, liberty was granted to file an appeal before the Appellate Authority, subject to depositing 25% of the disputed tax in cash through the Electronic Cash Register within 30 days from receipt of the order.
Upon such compliance, the Appellate Authority was directed to entertain the appeal under Section 107 of the CGST Act, 2017 and dispose of it on merits, after hearing the petitioner, within three months. The writ petition was dismissed with these directions.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mr. R. Parthiban, learned Special Government Pleader takes notice for the respondent.
2. This Writ Petition is taken up for final hearing at the time of admission with the consent of the learned counsel for the petitioner and the learned Special Government Pleader for the respondent.
3. In this Writ Petition, the petitioner has challenged the impugned assessment order in GSTIN. 33ABVPL8383P1ZJ/2018-19 and the summary order bearing Reference No. ZD331225442081X dated 30.12.2025 passed by the respondent, which was preceded by a Show Cause Notice in DRC-01 dated 17.06.2025, wherein the petitioner was also called upon to appear for personal hearing. However, the petitioner had not taken advantage of the same and thus, suffered the Impugned Order dated 30.12.2025.
4. The petitioner is before this Court against the impugned order dated 30.12.2025, whereby the proposal contained in the Show Cause Notice in DRC-01 dared 17.06.2025 has bee confirmed, together with interest and penalty. The specific case of the petitioner is that the petitioner was, all along, under the composition scheme and was, therefore, eligible to pay tax at the compounded rate in terms of the notifications issued under Section 10 of the respective GST enactments, 2017.
5. The learned counsel for the petitioner drew attention of this Court to Notification No.02/2019-Central Tax, dated 29.01.2019. The text of the said notification is reproduced below:
[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)]
Government of India
Ministry of Finance
(Department of Revenue)
[Central Board of Indirect Taxes and Customs]
Notification No. 02/2019 – Central Tax
New Delhi, the 29th January, 2019
G.S.R. …..(E).— In exercise of the powers conferred by sub-section (2) of section 1 of the Central Goods and Services Tax (Amendment) Act, 2018 (31 of 2018), the Central Government hereby appoints the 1st day of February, 2019, as the date on which the provisions of the Central Goods and Services Tax (Amendment) Act, 2018 (31 of 2018), except clause (b) of section 8, section 17, section 18, clause (a) of section 20, sub-clause (i) of clause (b) and sub-clause (i) of clause (c) of section 28, shall come into force.
[F.No.20/06/16/2018-GST (Pt. II)]
(Gunjan Kumar Verma)
Under Secretary to the Government of India
6. The said notification merely gives effect to the amendment to the proviso to Section 10(1) of the CGST Act. A similar notification has been issued to given effect to the corresponding amendment to the provisions of the TNGST Act, 2017. To give effect to the above notification, the Central Government also issued Notification No. 14/2019-Central Tax, dated 07.03.2019, with effect from 01.04.2019.
7. Thus, the contention of the petitioner that the benefit of composition levy was available where the turnover exceeded Rs.50,00,000/-, but was below Rs.1.50 crores, in terms of notification No.02/2019- Central Tax, dated 29.01.2019 with effect from 01.02.2019, is of no relevance, as the above notification was issued for implementing the above amendment was Notification No.14/2019-Central Tax, dated 07.03.2019 with effect from 01.04.2019. Therefore, the petitioner would be eligible for the composition levy in terms of the amendment only for the succeeding tax period commencing from 01.04.2019. Therefore, this writ petition is devoid of merits and is liable to be dismissed.
8. At this stage, the learned counsel for the petitioner submits that the petitioner is willing to pre-deposit 25% of the disputed tax as a condition for de novo adjudication.
9. The learned counsel for the petitioner has also made an endorsement to that effect in the Court Bundle, which is extracted hereunder:-
“The petitioner undertakes to pay 25% of the demand.”
10. Since the petitioner may have a case on merits insofar as the ultimate tax liability imposed is concerned, I am inclined to grant liberty to the petitioner to file an appeal before the Appellate Authority against impugned order, subject to the petitioner depositing 25% of the disputed tax in cash from the petitioner’s Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order.
11. Subject to such compliance, the petitioner’s appeal shall be entertained by the Appellate Authority under Section 107 of the CGST Act, 2017 and disposed of on merits and in accordance with law, within a period of three motaxmnths thereafter. Needless to state, the petitioner shall also be heard.
12 .This Writ Petition is dismissed, with above directions. No costs. Consequently, connected miscellaneous petition is closed.
