Tvl Excellent Engineering Enterprises Vs the State Tax… — GST and Indirect Tax | Madras HC (2025)

Tvl Excellent Engineering Enterprises Vs the State Tax… — GST and Indirect Tax | Madras HC (2025)

What the court decided

AI extract

Outcome

Writ Petition disposed of with directions: the assessment matter remitted to the respondent (State Tax Officer) to pass a fresh order on merits after examining the returns for August/September 2022 with reference to the invoice dated 30.08.2022 on the question of availment of Input Tax Credit on cess of Rs.2,10,917/-; penalty under Section 74 or Section 125 with interest for the intervening period to be determined within three months after hearing the petitioner; connected miscellaneous petition (W.M.P.No.28874 of 2025) closed; no costs.

Issue for consideration

Whether the impugned Assessment Order dated 29.11.2024 passed by the respondent under Section 74 of the respective GST enactments for tax period 2022-2023, confirming Input Tax Credit on cess with interest and penalty, ought to be quashed in exercise of jurisdiction under Article 226 of the Constitution of India. +1 more

Ratio / Principle

Taking note that the petitioner's reply dated 19.03.2024 to the Show Cause Notice appears not to have been fully considered by the respondent while passing the impugned order, and that the petitioner reversed the Input Tax Credit availed on SGST and CGST in the strength of the invoice dated 30.08.2022, the case is remitted back to the respondent to pass a fresh order on merits after examining the returns filed by the petitioner for August/September with reference to the invoice dated 30.08.2022 as to whether the petitioner had indeed availed Input Tax Credit on cess of Rs.2,10,917/-.

Key takeaways

On remand, the respondent shall pass appropriate orders for levying penalty under Section 74 or Section 125 of the respective GST enactments, as the case may be, together with interest accrued on account of the benefit the petitioner may have availed between the date of the original credit and the date of its reversal.ratio¶40
The fresh adjudication directed on remand shall be completed within a period of three (3) months from the date of receipt of a copy of the order.ratio¶44
Before passing any such orders on remand, the petitioner shall be heard.

Detailed headnote1 paragraphs

GST – Input Tax Credit on luxury vehicle – Assessment under Section 74 of the CGST/TNGST Act, 2017 for FY 2022-23 confirming ITC on cess with interest and penalty – Petitioner's reply dated 19.03.2024 to DRC-01 show cause notice disclosing reversal of ITC on SGST/CGST per invoice dated 30.08.2022 and proportionate reversal on 10.01.2024 allegedly not fully considered – Held, matter remitted to the State Tax Officer for a fresh order on merits after examining the returns for August/September 2022 as to whether ITC on cess of Rs.2,10,917/- was indeed availed – Penalty under Section 74 or Section 125 with interest for the period between original credit and reversal to be determined within three months, after hearing the petitioner – Writ Petition disposed of; connected miscellaneous petition closed; no costs.

W.P.No.25704 of 2025

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 20.11.2025

CORAM

THE HONOURABLE MR.JUSTICE C.SARAVANAN

W.P.No.25704 of 2025

and

W.M.P.No.28874 of 2025

Tvl. Excellent Engineering Enterprises, Rep, by its Proprietor Mr. Youssouf Mustansir, No.55, Rangakonar Street, Kattoor, Coimbatore – 641 009.

... Petitioner

Vs.

The State Tax Officer, Ram Nagar Assessment Circle, Coimbatore, Tamil Nadu.

... Respondent

Writ Petition filed under Article 226 of the Constitution of India, for issuance of a Writ of Certiorari, calling for the records of the Impugned Assessment Order in Ref. No. ZD3311242908980 dated 29.11.2024 under Section 74 of the CGST/TNGST Act, 2017 and uploaded the same along with the summary of order in DRC-07 for the Financial Year 2022-2023 from the

files of the respondent herein, quash the same.

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W.P.No.25704 of 2025

For Petitioner : Mrs.Aparna Nandakumar For Respondent : Mrs.P.Selvi Government Advocate

ORDER

The petitioner is before this Court against the impugned Assessment Order dated 29.11.2024 passed by the Respondent under Section 74 of the respective GST enactments for the tax period 2022-2023, which preceded a Show Cause Notice issued in DRC-01 dated 28.02.2024.

The petitioner appears to have purchased a vehicle (a luxury vehicle) on 30.08.2022 and had wrongly availed Input Tax Credit on 01.09.2022. It is also reflected in the reply dated 19.03.2024 filed by the petitioner to the aforesaid Show Cause Notice that the petitioner has reversed the Input Tax Credit, which was wrongly availed on 01.09.2022.

It is the specific case of the petitioner that the petitioner has not

availed any Input Tax Credit that was available at the time of purchase of the said vehicle on 30.08.2022.

The learned counsel for the petitioner would submit that on

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W.P.No.25704 of 2025

10.01.2024, the petitioner had also reversed the proportionate Input Tax Credit and had also given such particulars in the reply dated 19.03.2024.

However, it is submitted that the petitioner’s reply has not been considered and instead, the respondent confirmed the Input Tax Credit on cess and levied interest and penalty on the petitioner under Section 74 of the respective GST enactments.

The learned counsel for the petitioner would further submit that if the reply and returns filed by the petitioner for the month of August / September were examined, it would be clear that the petitioner had not availed any Input Tax Credit on cess to the tune of Rs.2,10,917/-, in spite of which, it is now confirmed, apart from the interest and penalty.

The Learned Government Advocate for the respondent, on the other hand would submit that these are disputed questions of facts which have to be adjudicated only before the Appellate Authority under Section 107 of the respective GST enactments and hence, prays for dismissal of this writ petition.

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The Learned Government Advocate would further submit that the petitioner may be relegated to work out the statutory remedy before the Appellate Authority under Section 107 of the respective GST enactments.

I have considered the submission made by the learned counsel for

the petitioner and learned Government Advocate for the respondent.

Taking note of the reply dated 19.03.2024 of the petitioner to the Show Cause Notice, which appears to have not been fully considered by the respondent while passing the impugned order, and further taking note of the fact that the petitioner reversed the Input Tax Credit availed on SGST and CGST in the strength of the invoice dated 30.08.2022, the case is remitted back to the respondent to pass a fresh order on merits after examining the returns filed by the petitioner for the month of August / September with reference to the invoice dated 30.08.2022 as to whether indeed the petitioner had availed Input Tax Credit on cess to the tune of Rs.2,10,917/-.

The respondent shall thereafter pass appropriate orders for levying penalty under Section 74 or Section 125 of the respective GST enactments, as the case may be, together with interest accrued on account of the benefit the

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petitioner may have availed between the date of the original credit and the date of its reversal, within a period of three (3) months from the date of receipt of a copy of this order.

It is needless to state that, before passing any such orders, the petitioner shall be heard.

With the above directions, this Writ Petition stands disposed of. Consequently, connected miscellaneous petition is closed. No costs.

20.11.2025

raja

Neutral Citation : Yes / No

To

The State Tax Officer, Ram Nagar Assessment Circle, Coimbatore, Tamil Nadu.

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W.P.No.25704 of 2025

C.SARAVANAN, J.

raja

W.P.No.25704 of 2025

20.11.2025

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