Case Summary
Court: High Court of Judicature at Madras
Case No.: W.P. No. 16474 of 2024 & W.M.P. Nos. 18033 & 18034 of 2024
Date of Judgment: 08.07.2025
Petitioner: M/s JIT Auto Comp, Hosur
Respondent: Assistant Commissioner, Hosur Division II, GST & Central Tax
Relevant Sections: Sections 73, 74, 122 of the CGST Act, 2017; Circular No. 183/15/2022-GST dated 27.12.2022
Category of Dispute: Input Tax Credit – Wrongful Availment Allegation
Facts (Para 2–4)
The petitioner was issued a notice under Section 74 of the CGST Act alleging excess availment of ITC based on differences between GSTR-2A and GSTR-3B for July 2017 to March 2020. The supplier of the petitioner had gone into liquidation, which initially prevented obtaining a supplier’s CA certificate. Later, the petitioner submitted a Chartered Accountant’s certificate confirming supplies, receipt of goods, payment along with GST. Despite this, the respondent ignored the evidence and passed an adverse order on 18.03.2024 demanding ₹81,12,876/-. The petitioner approached the Court, offering to deposit the disputed tax if the matter was remanded.
Questions in Dispute (Para 3–5)
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Whether proceedings under Section 74 (fraud/suppression) could be invoked merely due to non-filing of a supplier’s CA certificate?
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Whether the petitioner’s own CA certificate verifying supplies and tax payment should have been considered?
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Whether the impugned order lacked proper application of mind and violated Circular 183/15/2022?
Observations (Para 7–8)
The Court noted that:
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The supplier’s liquidation was an admitted fact, making it impossible to obtain the supplier’s certificate.
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The petitioner had provided an alternate CA certificate verifying receipt of goods and GST payment.
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The respondent failed to apply mind and mechanically invoked Section 74, ignoring available evidence.
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Circular 183/15/2022 was meant for verification of supplier’s tax payment, but the department could independently verify transactions without rejecting petitioner’s certificate.
The Court held that the impugned order suffered from non-application of mind and was unsustainable in law.
Judgment (Para 9–10)
The Madras High Court:
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Set aside the order dated 18.03.2024 passed under Section 74.
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Directed that proceedings be treated under Section 73 (non-fraudulent cases).
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Ordered remand for fresh consideration, provided the petitioner deposits ₹81,12,876/- within two weeks.
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Disposed of the writ petition with these directions.
Table of Cases Referred
| Case / Circular | Citation | Verdict / Relevance |
|---|---|---|
| Circular No. 183/15/2022-GST (27.12.2022) | CBIC Circular | Intended to ensure supplier remits GST; Court noted department can independently verify transactions even without supplier’s CA certificate. |
Between Fine Lines
For businesses, this ruling emphasizes that mere technical lapses like non-availability of a supplier’s CA certificate cannot justify invoking Section 74. Where there is no fraud, suppression, or willful misstatement, proceedings must be under Section 73. Authorities must apply their mind, evaluate alternate evidence, and avoid mechanical orders, otherwise such orders will not stand judicial scrutiny.
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