Mnk Traders vs. The State Tax Officer/ Commercial Tax Officer

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 Special Government Pleader for the respondent.

The petitioner is before this Court against the Impugned Order dated 27.12.2025 in DRC-07, whereby the proposal in Show Cause Notice in DRC-01 dated 30.09.2025, in the absence of documents to substantiate the replies filed by the petitioner dated 22.05.2025 and 03.06.2025. 4. The impugned order itself records that the petitioner has availed ineligible Input Tax Credit and that the petitioner was engaged in sale and supply 2/6 https://www.mhc.tn.gov.in/judis of exempted goods, namely, dry fish.

Prima facie indications are that the petitioner has not utilised the Input Tax Credit which is sought to be recovered from the petitioner. Therefore, there is no scope for sustaining the demand, assuming that the petitioner has merely availed the Input Tax Credit and reflected the same in the GSTR-3B.

Considering the same, the impugned order is quashed and the case is remitted back to the respondent to redo the exercise and examine whether the ineligible credit that was availed was utilised or not. If the ineligible credit had not been utilised, the same is directed to be reversed directly from the petitioner's Electronic Credit Ledger. In the alternative, if the petitioner has utilised the same, appropriate orders may be passed after considering the reply of the petitioner.

The petitioner shall file supporting documents to substantiate the replies filed by the petitioner dated 22.05.2025 and 03.06.2025 within a period of thirty (30) days from the date of receipt of a copy of this order. 3/6 https://www.mhc.tn.gov.in/judis

In case the petitioner complies with the above stipulations, the respondent shall proceed to pass a final order on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months of such documents. Subject to the petitioner complying with the above stipulations, the attachment of the bank account of the petitioner shall also stand automatically vacated.

It is made clear that bank attachment shall be lifted subject to the petitioner not being in arrears of any other amount for any other tax period barring the amount demanded under the impugned Order.

In case the petitioner fails to comply with any of the stipulations, 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.

Needless to state, before passing any such order, the respondent shall give due notice to the petitioner. The petitioner shall cooperative with the respondent. 4/6 https://www.mhc.tn.gov.in/judis

This Writ Petition stands disposed of, with the above observations. No costs. Consequently, connected Writ Miscellaneous Petition is closed. Index : Yes / No 10.08.2026 Internet : Yes / No apd To The State Tax Officer/ Commercial Tax Officer, Tuticorin II Assessment Circle, Office of the Assistant Commissioner (ST), C.T. Building, 282 North Beach Road, Tuticorin-628001. 5/6 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.

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