Rubfila International Limited vs. The Assistant Commissioner (State Tax)
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The petitioner, Rubfila International Limited, filed a writ petition challenging an order dated 31.07.2024 passed by the Assistant Commissioner (State Tax). The impugned order confirmed a GST demand for the tax period 2019-2020. The petitioner contended that the demand confirmed in the order exceeded the proposal made in the Show Cause Notice dated 22.05.2024. The Show Cause Notice had proposed a demand of Rs.36,45,935/-, whereas the final order confirmed a demand of Rs.2,10,56,056/-. The petitioner argued that this increase without a proper explanation or opportunity to respond violated principles of natural justice. The respondents are the Assistant Commissioner (State Tax) and another Assistant Commissioner (ST)(FAC).
Held
The Court held that the impugned order dated 31.07.2024, which confirmed a demand of Rs.2,10,56,056/- for the tax period 2019-2020, was unsustainable. The Court found a manifest violation of the principles of natural justice because the confirmed demand significantly exceeded the amount proposed in the Show Cause Notice dated 22.05.2024 (Rs.36,45,935/-). The Court reasoned that the petitioner was not given an adequate opportunity to address the substantially increased demand. To balance the interests of both parties, the Court quashed the impugned order and remitted the case back to the first respondent. The Court directed that the quashed order be treated as an addendum to the original Show Cause Notice, and the petitioner be allowed to file a fresh reply within 30 days of receiving the order. The respondents were instructed to pass a fresh order on merits, considering the petitioner's reply and potentially issuing a corrigendum to the original notice if they desired.
Key Issues
1. Whether the impugned order dated 31.07.2024, which confirmed a GST demand significantly exceeding the amount proposed in the Show Cause Notice dated 22.05.2024, is sustainable in law, considering the principles of natural justice and the provisions of Section 73 of the respective GST enactments? Petitioner's arguments: The petitioner argued that the impugned order confirmed a demand of Rs.2,10,56,056/-, which is substantially higher than the Rs.36,45,935/- proposed in the Show Cause Notice. This increase without providing a fresh opportunity to the petitioner to respond to the enhanced demand constitutes a violation of the principles of natural justice. The petitioner relied on the general principle that a demand cannot be enhanced beyond the proposal in the show cause notice without issuing a supplementary notice. Revenue's arguments: The judgment does not record any specific arguments made by the respondents. However, the Court's directions suggest that the respondents were expected to justify the enhanced demand or provide an opportunity to the petitioner to respond to it.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R The petitioner is before this Court challenging the impugned order dated 31.07.2024, whereby an amount in excess of the proposal contained in the Show Cause Notice dated 22.05.2024 in Form GST DRC-01 has been confirmed.
The dispute pertains to the tax period 2019-2020. This Writ Petition is pending since 10.09.2024. The impugned order has been passed under Section 73 of the respective GST enactments. As per the decision of the Principal Bench of this Court in M/s.Tata Play Limited v. Union of India, through its Secretary, Ministry of Finance, North Block, New Delhi - 110 001, dated 12.06.2025 in W.P.No.17184 of 2024 etc. batch, insofar as the tax period 2019-2020 is concerned, the last date for passing the order would have expired on 28.02.2025. _____________ Page No. 2 of 5 https://www.mhc.tn.gov.in/judis
In the present case, the impugned order has been passed well before the expiry of the extended period of limitation, in view of the COVID-19 Notifications, as enunciated by this Court in M/s.Tata Play Limited, referred to supra.
It is noticed that the amount proposed in the Show Cause Notice in Form GST DRC-01 dated 22.05.2024 was confined to Rs.36,45,935/- towards tax, interest and penalty. However, the demand ultimately confirmed in the impugned order is Rs.2,10,56,056/-. As such, there is a manifest violation of the principles of natural justice.
Therefore, to balance the interests of the petitioner as well as the Department, I am inclined to quash the impugned order and remit the case back to the first respondent to pass a fresh order.
The impugned order dated 31.07.2024, which stands quashed by this order, shall be treated as an addendum to the Show Cause Notice in Form GST DRC-01 dated 22.05.2024. The petitioner shall file a proper reply within a period of 30 days from the date of receipt of a copy of this order. _____________ Page No. 3 of 5 https://www.mhc.tn.gov.in/judis
In case the petitioner complies with the above stipulation, the respondents shall proceed to pass a final order on merits. Needless to state, the issue shall be examined only on merits and not on the ground of limitation. If the respondent Department so desires, it may issue a corrigendum to the Notice dated 22.05.2024, incorporating all the particulars.
Accordingly, this Writ Petition stands disposed of. There shall be no order as to costs. Consequently, the connected Miscellaneous Petitions are closed. 04.08.2026 JEN NCC : Yes / No Index : Yes / No To 1.The Assistant Commissioner (State Tax), Palani-1 Assessment Circle, Commercial Taxes Office Building, Old Dharapuram Road, Palani - 624 601. 2.The Assistant Commissioner (ST)(FAC), Dindigul Town Assessment Circle, Commercial Taxes Building, Sub-Collector Office Road, Dindigul - 624 001. _____________ Page No. 4 of 5 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J. JEN
2026 _____________ Page No. 5 of 5 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.