Tvl. K Raju vs. The Principal Commissioner Of Central Goods And Services Tax And Central Excise

Held

The Court quashed the impugned order dated 17.09.2025 and remitted the case back to the second respondent for de novo adjudication. This decision was made subject to the petitioner depositing 25% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving a copy of the order, after deducting any amounts already recovered. The Court directed the petitioner to file a reply to the Show Cause Notice dated 29.05.2025, treating the impugned order as an addendum, along with supporting documents. If the petitioner complied with these stipulations, the second respondent was to pass a fresh order on merits within three months of the reply and pre-deposit. The attachment of the petitioner's bank account would be automatically vacated upon compliance. The Court clarified that the bank attachment would be lifted only if the 25% deposit was made and the petitioner had no other arrears for other tax periods. The respondents were at liberty to proceed as if the writ petition was dismissed if the petitioner failed to comply with the stipulations. The Court explicitly stated that due notice would be given to the petitioner before any final order is passed.

Facts

The petitioner, Tvl. K Raju, Sole Proprietor of M/s.K.Raju, filed a writ petition challenging an order dated 17.09.2025 passed by the Assistant Commissioner of Central Tax (2nd respondent) under Section 74 of the Central Goods and Services Tax Act, 2017. This order confirmed a demand for tax for the financial years 2020-2021, 2021-2022, 2022-2023, and 2023-2024, along with consequential summary orders in Form GST DRC-07. The impugned order was passed in the absence of a reply from the petitioner, who had sought time for personal hearing. The petitioner sought directions for a fresh reconciliation of their tax liability, considering various documents and deductions, and to extend the benefit of Section 128A of the CGST Act, 2017.

Key Issues

1. Whether the impugned order passed by the 2nd respondent under Section 74 of the CGST Act, 2017, is liable to be quashed due to procedural irregularities, specifically the absence of a proper reply from the petitioner? 2. Whether the petitioner is entitled to a fresh reconciliation of their tax liability, taking into account government work orders, sanction proceedings, payment proceedings, GSTR 7 statements, unreceived sanctioned amounts, GST deductions, other statutory and contractual deductions, and works executed under MGNREGS? 3. Whether the petitioner is eligible for the benefit of Section 128A of the CGST Act, 2017, for the applicable tax periods? Petitioner's contentions: The petitioner argued that the impugned order was passed without considering their submissions and sought a fresh adjudication. They also highlighted specific amounts that were sanctioned but not received, GST deductions, and other deductions that should be factored into the tax liability calculation. They further sought the benefit of Section 128A. The petitioner undertook to deposit 25% of the disputed tax as a condition for de novo adjudication. Revenue's contentions: The judgment does not record any specific arguments made by the revenue or state respondents.