M/s.Sign Makers Vs State Tax officer — GST and Indirect Tax | Madras HC (2026)

M/s.Sign Makers Vs State Tax officer — GST and Indirect Tax | Madras HC (2026)

What the court decided

AI extract

Outcome

Impugned order dated 23.08.2024 partly quashed insofar as Defect No.1 (excess ITC) and the interest thereon; case remitted to the respondent to pass a fresh order on merits after verification and hearing, upon the petitioner filing a reply within 30 days; failing which recovery permitted as if the writ petition was dismissed in limine; connected miscellaneous petitions closed; no costs.

Issue for consideration

Whether the impugned Assessment Order dated 23.08.2024, insofar as Defect No.1 (demand pertaining to Input Tax Credit) and the interest thereon, is sustainable in view of the statutory insertion of Sections 16(5) and 16(6) of the respective GST enactments by the Finance (No.2) Act, 2024. +1 more

Court's answer

Since the petitioner is entitled to input tax credit in view of the statutory intervention (insertion of Sections 16(5) and 16(6) of the respective GST enactments by the Finance (No.2) Act, 2024), the impugned order is partly quashed and the case is remitted back to the respondent to pass a fresh order on merits, insofar as Defect No.1 and the interest thereon, namely the excess Input Tax Credit (ITC) claimed on account of non-reconciliation of information declared in GSTR-3B / Invalid ITC claim in terms of Section 16(4) of the respective GST enactments.

Ratio / Principle

The petitioner shall file a reply to the Show Cause Notice dated 26.05.2024, treating the impugned Order dated 23.08.2024 as an addendum, with all requisite documents within 30 days; upon such reply, the respondent shall verify whether the petitioner received the goods and complied with the other requirements of Section 16 of the respective GST enactments, and pass appropriate orders on merits within three months from the date of such reply.

Key takeaways

Before passing any order on remand, the petitioner shall be heard.ratio¶37
If the petitioner fails to file the reply within the stipulated time, the respondent is at liberty to proceed against the petitioner to recover the tax in accordance with law as if the writ petition was dismissed in limine.ratio¶39

Detailed headnote1 paragraphs

Madras High Court (C. Saravanan, J.), W.P.No.5437 of 2026, decided 17.02.2026 – GST – assessment order dated 23.08.2024 under section 73 of the act for FY 2019-20 (with summary in Form GST DRC 07, no. ZD3308242117869) demanding excess Input Tax Credit (Defect No.1) with interest, and rejection of section 128A application in FORM GST SPL-07 (no. ZD3309253709215, dated 26.09.2025) – writ petition disposed of at admission with consent – in view of insertion of Sections 16(5) and 16(6) of the respective GST enactments by the Finance (No.2) Act, 2024 (15 of 2024), dt. 16-8-2024, w.e.f. 27-9-2024 vide SO 4253(E), dt. w.r.e.f. 01-07-2017, petitioner held entitled to input tax credit – impugned order partly quashed and matter remitted to respondent for fresh order on merits on Defect No.1 and interest (excess ITC on account of non-reconciliation of GSTR-3B / invalid ITC claim under Section 16(4)) – petitioner to reply to SCN dated 26.05.2024 (assessment order treated as addendum) within 30 days; respondent to verify receipt of goods and Section 16 compliance and pass orders within three months after hearing – on default, recovery permitted as if writ dismissed in limine – connected miscellaneous petitions closed, no costs.

W.P.No.5437 of 2026

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 17.02.2026

CORAM

THE HONOURABLE MR.JUSTICE C.SARAVANAN

W.P.No.5437 of 2026

and W.M.P.Nos.5960 & 5961 of 2026

M/s. Sign Makers, Rep by its Partner – Shahabudeen Peer Mohammed 5/87, Karupakkal Thottam Nava India, Pappanaickanpalayam, Coimbatore.

... Petitioner

Vs.

State Tax Officer, Office of the Commercial Tax Officer P.N.Palayam Circle, Coimbatore – 18.

... Respondent

Writ Petition filed under Article 226 of the Constitution of India, for issuance of a Writ of Certiorari, calling for the records relating to the impugned proceedings passed by the Respondent in order vide GSTIN: 33DBRPP3447M1ZZ/2019-20 dated 23.08.2024 along with consequential summary of order in Form GST DRC 07 bearing no. ZD3308242117869 dated 23.08.2024 passed under section 73 of the act, along with order for 1/6

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W.P.No.5437 of 2026

rejection of application submitted under section 128A of the act in FORM GST SPL-07, bearing no. ZD3309253709215 dated on 26.09.2025 for FY 2019-20 to quash the same.

For Petitioner : M/s.R.Hemalatha

For Respondent : Mrs.P.Selvi Government Advocate

ORDER

Mrs.P.Selvi, learned Government Advocate, takes notice for the respondent.

With the consent of the learned counsel for the petitioner and the

learned Government Advocate for the respondent, this writ petition is being disposed of at the time of admission.

In this writ petition, the petitioner has challenged the impugned Order dated 23.08.2024 passed under Section 73 of the respective GST enactments for the tax period 2019-2020, along with the summary order dated 23.08.2024, and along with the Order dated 26.09.2025, whereby the application filed under Section 128A, has been rejected.

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W.P.No.5437 of 2026

The learned counsel for the petitioner would submit that the

petitioner is aggrieved by the impugned Assessment Order dated 23.08.2024, insofar as defect No.1 and the interest thereon are concerned, as the demand pertains to the Input Tax Credit.

The learned counsel for the petitioner would further submit that the matter can be remanded to the respondent in light of the statutory intervention involving the insertion of Sections 16(5) and 16(6) of the respective GST enactments by the Finance (No.2) Act, 2024 (15 of 2024), dt. 16-8-2024, w.e.f. 27-9-2024 vide SO 4253(E), dt. w.r.e.f. 01-07-2017.

Since the petitioner is entitled to input tax credit in view of the above statutory intervention, the impugned order is partly quashed, and the case is remitted back to the respondent to pass a fresh order on merits, insofar as Defect No.1 and the interest thereon, namely, the excess Input Tax Credit (ITC) claimed on account of non-reconciliation of information declared in GSTR-3B / Invalid ITC claim in terms of Section 16(4) of the respective GST enactments.

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W.P.No.5437 of 2026

The petitioner shall file a reply to the impugned Show Cause Notice

dated 26.05.2024, treating the impugned Order dated 23.08.2024 as an addendum, along with all requisite documents, within 30 days of receiving a copy of this order.

Upon filing such reply, the respondent shall verify whether the petitioner received the goods and complied with the other requirements of Section 16 of the respective GST enactments, and pass appropriate orders on merits, within a period of three months from the date of such reply.

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

In case the petitioner fails to file a reply within the above stipulated

time, the respondent is at liberty to proceed against the petitioner to recover the tax in accordance with law as if this writ petition was dismissed in limine today.

This Writ Petition stands disposed of with the above directions.

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W.P.No.5437 of 2026

Consequently, connected miscellaneous petitions are closed. No costs.

17.02.2026

raja Neutral Citation : Yes / No

To The State Tax Officer, Office of the Commercial Tax Officer P.N.Palayam Circle, Coimbatore – 18.

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C.SARAVANAN, J.

raja

W.P.No.5437 of 2026

17.02.2026

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