Tvl. Sahayarani Medicals vs. The Assistant Commissioner (St)

Held

The Court held that the petitioner's contention regarding eligibility for composition levy based on Notification No. 02/2019-Central Tax dated 29.01.2019 was not relevant for the tax period 2018-19. The Court reasoned that this notification merely gave effect to an amendment, and the actual implementation notification was Notification No. 14/2019-Central Tax dated 07.03.2019, which was effective from 01.04.2019. Consequently, the petitioner would only be eligible for the composition levy from the tax period commencing 01.04.2019. The Court found the writ petition to be devoid of merits. However, acknowledging that the petitioner might have a case on merits concerning the ultimate tax liability, the Court granted liberty to the petitioner to file an appeal before the Appellate Authority, subject to depositing 25% of the disputed tax in cash within thirty days. The Appellate Authority was directed to entertain the appeal and dispose of it on merits within three months, ensuring the petitioner was heard. The writ petition was dismissed with these directions.

Facts

The petitioner, Tvl. Sahayarani Medicals, represented by its Proprietor Louis Raja, filed a writ petition challenging an assessment order dated 30.12.2025 and a summary order bearing Reference No. ZD331225442081X, passed by the Assistant Commissioner (ST), Sivagangai Assessment Circle. The impugned order confirmed the proposals in a Show Cause Notice dated 17.06.2025, including interest and penalty. The petitioner's primary contention was that they were under the composition scheme and eligible to pay tax at a compounded rate as per notifications under Section 10 of the GST enactments. The assessment period under challenge is 2018-19. The petitioner had not availed the personal hearing offered in the Show Cause Notice.

Key Issues

1. Whether the petitioner was eligible for the benefit of composition levy for the tax period 2018-19, considering the turnover and the effective date of relevant notifications issued under Section 10 of the CGST Act and TNGST Act, 2017? The petitioner argued that they were eligible for the composition levy, citing Notification No. 02/2019-Central Tax dated 29.01.2019, which they contended allowed composition levy for turnovers exceeding Rs. 50,00,000/- but below Rs. 1.50 crores. The respondent (Revenue) contended that Notification No. 02/2019-Central Tax dated 29.01.2019 was issued to give effect to an amendment to the proviso to Section 10(1) of the CGST Act. However, the notification that gave effect to this amendment was Notification No. 14/2019-Central Tax dated 07.03.2019, with an effective date of 01.04.2019. Therefore, the petitioner would only be eligible for the composition levy from the succeeding tax period commencing 01.04.2019.