Tvl.Cryochem Gases vs. The Deputy State Tax Officer-1

The impugned Show Cause Notice was issued to the petitioner stating that the Input Tax Credit (ITC) claimed by the petitioner was found to be ineligible, as the same related to the construction of immovable property. The petitioner submitted a reply stating that the purchases were not made for the construction of any immovable property, but in relation to the foundation for gas tank equipment and electrical works for gas-filling equipment. 2 https://www.mhc.tn.gov.in/judis

According to the petitioner, the same forms part and parcel of the machinery and the business activity of the petitioner, and therefore cannot be treated as construction of immovable property.

Despite the said reply, in the impugned order, the issue is merely extracted, followed by a reproduction of the petitioner’s reply, and, in conclusion, the respondent authority has simply stated that the taxpayer had admitted that ITC was availed on construction work, and therefore, such construction of immovable property is ineligible for input tax credit. Accordingly, the proposal in the Show Cause Notice has been confirmed.

The crucial aspect of the petitioner’s contention, namely whether the activity in question constitutes construction of immovable property or forms part of machinery/facilities used in the petitioner’s business (such as gas-filling equipment), has not been considered. No reasons have been assigned in this regard. Therefore, the impugned order cannot be sustained. 3 https://www.mhc.tn.gov.in/judis

However, it is also seen that, after receipt of the order, the petitioner did not file an appeal within the prescribed time. Therefore, while granting one more opportunity to the petitioner to put forth a detailed explanation, and directing the respondent to consider the same and pass a reasoned order, I am of the view that an appropriate condition may also be imposed on the petitioner.

In any event, if the petitioner establishes his claim, the amount already deposited may be adjusted towards any other dues. In view thereof, this writ petition is allowed on the following terms:- i. The petitioner is directed to deposit 25% of the disputed tax amount within a period of four weeks from the date of receipt of a web copy of this order. ii. Upon such deposit, the impugned order dated 10.11.2025 shall stand set aside and the matter shall stand remanded to the file of the respondent. iii. It is open to the petitioner to file an additional reply along with supporting documents and to avail the opportunity of personal 4 https://www.mhc.tn.gov.in/judis hearing. Thereafter, the respondent shall consider the matter afresh and pass orders on merits, specifically assigning detailed reasons as to whether the discrepancy in question pertains to the construction of immovable property or forms part of the machinery/business facility of the petitioner, in respect of which Input Tax Credit can be claimed. iv. Since the impugned order of assessment is set aside, any attachment of the bank account made pursuant to the impugned order shall stand raised. v. No costs. Consequently the connected miscellaneous petition shall stand closed. 15.04.2026 Neutral Citation: No rgm To The Deputy State Tax Officer-1, Woraiyur Assessment Circle, Commercial Tax Building, Trichy. 5 https://www.mhc.tn.gov.in/judis D.BHARATHA CHAKRAVARTHY