Tvl. Om Sakthi Agency vs. The Deputy State Tax Officer - 2 /
Original PDF →Facts
The petitioner, Tvl. Om Sakthi Agency, filed a writ petition challenging an assessment order dated 26.07.2024 and a consequential summary order dated 26.07.2024, passed by the Deputy State Tax Officer. These orders confirmed a demand proposed in a Show Cause Notice dated 25.02.2024 for the tax period April 2019 to March 2020, under Section 73 of the GST enactments. The petitioner did not reply to the Show Cause Notice, leading to the confirmation of the demand. The petitioner had also attempted to resolve the issue under Section 128A of the GST enactments by filing an application in Form GST SPL-02 on 26.07.2024, which was rejected on 30.07.2025. The petitioner claimed to have paid the entire disputed tax into their Electronic Credit Ledger via Form GST DRC-03 dated 06.12.2022, but had not subsequently adjusted this amount by generating DRC-03A.
Held
The Court held that it was inclined to remit the case back to the respondent to verify whether any subsequent recovery of the amount towards the tax liability confirmed by the impugned order had been made from the amount paid into the Electronic Credit Ledger on 06.12.2022. The Court noted that while the petitioner admitted to the tax liability and made an attempt to settle under the Amnesty Scheme, there were no records indicating that the amount paid into the credit ledger had been debited by the Department towards the confirmed tax liability. If no payment or appropriation had occurred, the petitioner was directed to deposit the entire amount of tax, interest, and penalty within thirty days. Upon compliance, the petitioner was granted liberty to file a reply to the Show Cause Notice and contest the liability, particularly concerning the imposition of penalty. Any variation between the confirmed demand and a subsequent order would be adjusted.
Key Issues
1. Whether the respondent authority has properly verified the adjustment of the tax amount paid by the petitioner into their Electronic Credit Ledger towards the confirmed tax liability, considering the petitioner's claim of having paid the entire disputed tax. The petitioner argued that they had paid the entire disputed tax liability through Form GST DRC-03 dated 06.12.2022 into their Electronic Credit Ledger. They contended that this payment should have been adjusted against the confirmed demand. The petitioner also highlighted their attempt to settle the case under the Amnesty Scheme under Section 128A, which was rejected. The respondent, represented by the Government Advocate (Tax), did not explicitly record any arguments in the judgment regarding the verification of the credit ledger payment or the adjustment of the tax liability. However, the court's order implies a need for verification by the respondent.
Sections Cited
Section 73, Section 128A
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Before: and
M/s.P.Sudarkodi Natchiyar, learned Government Advocate (Tax), takes notice for the respondent.
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 learned Government Advocate (Tax) for the respondent.
The petitioner is before this Court against the impugned Assessment Order dated 26.07.2024 bearing reference in GSTIN 33BINPT0821L1Z0/2019-20 and consequential Summary Order in Ref No. ZD3307243227776 dated 26.07.2024, whereby the proposal in the Show Cause Notice dated 25.02.2024 issued for the tax period April 2019 to March 2020 has been confirmed under Section 73 of the respective GST enactments. It is noticed that there was no reply to the Show Cause Notice and thus, the demand was confirmed. 2/6 https://www.mhc.tn.gov.in/judis
It is noticed that the petitioner also accepted the tax liability and attempted to have the issue resolved under Section 128A of the respective GST enactments by filing an application in Form GST SPL-02 on 26.07.2024. 5. It is the case of the petitioner that the entire disputed tax confirmed by the impugned order has also been paid into the petitioner's Electronic Credit Ledger in Form GST DRC-03 dated 06.12.2022. 6. A reading of the order in Form GST SPL-07 dated 30.07.2025 indicates that the petitioner has not subsequently adjusted the amount deposited towards the tax liability by generating DRC-03A. Thus, it is evident that the petitioner has admitted to the tax liability, but had made a half-hearted attempt to settle the case under the Amnesty Scheme under Section 128A of the respective GST enactments, which came to be rejected on 30.07.2025. 7. The amount that was deposited in Form GST DRC-03 dated 06.12.2022 would have been adjusted towards the tax liability for the succeeding period. 3/6 https://www.mhc.tn.gov.in/judis Even though the intention of the petitioner appears to be to settle the case under the Amnesty Scheme, there are no records to indicate that the said amount has also been debited by the Department towards the tax liability as confirmed by the Impugned Order dated 26.07.2024. 8. However, considering the fact that the petitioner claims that the entire disputed tax has been paid, I am inclined to remit the case back to the respondent to verify whether there has been any subsequent recovery of the amount towards the tax liability confirmed by the impugned order from and out of the amount paid into the Electronic Credit Ledger on 06.12.2022. 9. In case there has been no payment or appropriation of the aforesaid amount towards the tax liability, the petitioner is directed to deposit the entire amount of tax, interest and penalty within a period of thirty (30) days from the date of receipt of a copy of this order.
In case the petitioner complies with the above stipulations, the 4/6 https://www.mhc.tn.gov.in/judis petitioner is given liberty to file a reply to the Show Cause Notice in DRC 01 dated 20.05.2024 that preceded the Impugned Order dated 26.07.2024. It is open for the petitioner to contest the liability, insofar as the imposition of penalty is concerned. In case there is any variation between the demand confirmed by the impugned order and the order to be passed subsequently, the same shall be adjusted accordingly.
This Writ Petition is disposed of, with the above observations. No costs. Consequently, connected miscellaneous petition is closed. Index : Yes / No 18.08.2026 Internet : Yes / No apd To The Deputy State Tax Officer - 2 / The Deputy Commercial Tax Officer, Aruppukottai Assessment Circle, Virudhunagar District. 5/6 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
apd
2026 6/6 https://www.mhc.tn.gov.in/judis
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.