M/S.Sri Velmurugan Starch Industries vs. The State Tax Officer
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The petitioner, M/s. Sri Velmurugan Starch Industries, challenged an order in Form GST DRC 07 and its detailed order, both dated 30.03.2026, passed by the respondent, The State Tax Officer, for the tax period 2025-2026. This order was issued under Section 74 of the GST enactments, 2017, following a Show Cause Notice dated 05.08.2025. The petitioner had not availed the opportunity for a personal hearing and consequently suffered the impugned order. The petitioner then expressed willingness to pre-deposit 25% of the disputed tax for de novo adjudication.
Held
The Court initially quashed the impugned order dated 30.03.2026 and remitted the case back to the respondent for fresh adjudication. This was subject to the petitioner depositing 25% of the disputed tax within thirty days and filing a reply to the Show Cause Notice, treating the impugned order as an addendum. The respondent was directed to pass a final order on merits within three months of the reply and pre-deposit. However, in a subsequent order dated 22.09.2026, the Court directed the deletion of paragraphs concerning the pre-deposit condition and related directions. This was based on the petitioner's submission that the entire disputed tax had already been paid, which was confirmed by the respondent. The Court noted that a revised notice dated 19.08.2026 had been issued stating the payment of the entire disputed tax. The operative directions were modified to reflect this payment, effectively removing the pre-deposit requirement and proceeding with the adjudication based on the already paid tax.
Key Issues
1. Whether the impugned order dated 30.03.2026, passed under Section 74 of the GST enactments, 2017, is liable to be quashed? Petitioner's contention: The petitioner sought to quash the impugned order and was willing to pre-deposit 25% of the disputed tax as a condition for fresh adjudication. The petitioner later submitted that the entire disputed tax had already been paid, and this fact was inadvertently not brought to the Court's notice. Respondent's contention: The respondent, represented by the State Tax Officer, took notice of the writ petition. The respondent confirmed the petitioner's submission that the entire disputed tax had been paid.
Sections Cited
Section 74
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Before: and
M/s.P.Sudarkodi Natchiyar, learned Counsel for State of TN, 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 Counsel for State of TN for the respondent.
In this Writ Petition, the petitioner has challenged the impugned Order Form GST DRC 07 vide Reference No.ZD330326276226E along with its detailed order vide GSTIN.33AARFS9891G1ZF both dated 30.03.2026 for the tax period 2025-2026 passed by the respondent under Section 74 of the respective GST enactments, 2017, which was preceded by a Show Cause Notice in DRC 01 dated 05.08.2025, wherein the petitioner was also called upon to appear for 2/9 https://www.mhc.tn.gov.in/judis personal hearing. However, the petitioner had not taken advantage of the same and thus, suffered the Impugned Order dated 30.03.2026. 4. At this stage, the learned counsel for the petitioner submits that the petitioner is willing to pre-deposit 25% of the disputed tax as a condition for de novo adjudication.
The learned counsel for the petitioner has also made an endorsement to that effect in the Court Bundle, which is extracted hereunder:-
“It is submitted that the petitioner permitted to deposit 25% amount.”
In view of the above, the impugned order is quashed and the case is remitted back to the respondent to pass a fresh order subject to the petitioner depositing 25% of the disputed tax in cash from the petitioner's Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order. 3/9 https://www.mhc.tn.gov.in/judis
Within such time, the petitioner shall also file a reply to the Show Cause Notice in DRC 01 dated 05.08.2025 together with requisite documents to substantiate the case by treating the Impugned Order dated 30.03.2026 as an addendum to the Show Cause Notice dated 05.08.2025. 8. 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 reply / pre-deposit.
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.
This Writ Petition stands disposed of, with the above observations. No costs. Consequently, connected Writ Miscellaneous Petitions are closed. Index : Yes / No 27.07.2026 Internet : Yes / No (1/2) apd 4/9 https://www.mhc.tn.gov.in/judis To The State Tax Officer, Thuraiyur Assessment Circle, Thuraiyur. 5/9 https://www.mhc.tn.gov.in/judis apd
2026 (1/2) 6/9 https://www.mhc.tn.gov.in/judis W.P.(MD)Nos.20875 and 20876 of 2026 These Writ Petitions are listed today under the caption “for being mentioned” at the instance of the learned counsel for the petitioner.
The learned counsel for the petitioner submits that both the Writ Petitions were disposed of by this Court by separate orders dated 27.07.2026, wherein, in paragraph 5, the submission/undertaking of the petitioner was recorded.
It is submitted by the learned counsel for the petitioner that the petitioner had already paid the entire disputed tax and that, due to an inadvertent mistake, the said fact could not be brought to the notice of this Court at the time of passing the orders.
The learned Government Advocate (Taxes) appearing for the respondent also confirms the said position and submits that a revised notice dated 7/9 https://www.mhc.tn.gov.in/judis
2026 has been issued to the petitioner, stating that the petitioner has paid the entire disputed tax.
Considering the aforesaid submissions, the Registry is directed to delete paragraph 4, paragraph 5, and the following portion in paragraph 6 in the orders dated 27.07.2026 : “subject to the petitioner depositing 25% of the disputed tax in cash from the petitioner’s Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order.”
Further, the first three words in paragraph 7, namely, “Within such time”, shall also stand deleted. 22.09.2026 smn2 Note:- Registry is directed to carry out the aforesaid corrections and issue fresh order copies. 8/9 https://www.mhc.tn.gov.in/judis smn2 W.P.(MD)Nos.20875 and 20876 of 2026 22.09.2026 9/9 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.