Authority: High Court of Judicature at Madras

Order Date: 12.06.2026

Case Overview

  • Petitioner: KPR Enterprises (proprietor), represented by Dr. S. Sathyanarayanan.
  • Respondent: State Tax Officer, Inspection Cell‑5, Office of the Joint Commissioner (ST) (Int), Hosur Division.
  • Writ Petitions: W.P. Nos. 35453, 35458, 35463 of 2024 (tax periods 2018‑2019, 2019‑2020, 2020‑2021) and corresponding W.M.P. Nos. 38346, 38355, 38364 of 2024.
  • Relief Sought: Writ of Certiorari and Mandamus to quash the impugned GST orders dated 15.07.2024 and to direct fresh orders after considering the petitioner's reply.
  • Procedural Timeline:
  • Intimation Notices (DRC‑01A) issued: 20.03.2024 (reply on 23.03.2024).
  • Show‑Cause Notices (DRC‑01) issued: 02.04.2024 (reply on 25.06.2024).
  • Impugned Orders passed: 15.07.2024.
  • Petitioner’s Contentions:

1. Business inability led to contract with contractor B.T. Nagaraj Reddy for boulder extraction; GST was discharged by the contractor.

2. No incriminating findings in the March‑2024 inspection.

3. No fraud, willful misstatement, or suppression of facts.

4. Only rock boulders were sold; no loss to exchequer.

5. Orders were passed without a hearing, violating natural justice.

  • Respondent’s Position: The orders are detailed and merit no interference; seek dismissal with exemplary costs.
  • Departmental Findings:
  • Quantity of boulders extracted (as per Show‑Cause Notice): 708,000 cubic meters (value declared in GSTR‑1: ₹34,09,433).
  • Seigniorage fee paid by petitioner is substantially higher than the quantity supplied, indicating suppressed turnover.
  • The department invoked Section 74 of the GST Act to assess tax on the suppressed turnover, using the National Standard Method to estimate escaped turnover.
  • Legal Context:
  • The court referenced 53 similar cases where extended limitation under Section 74 was upheld.
  • Inspection was conducted prior to the issuance of the intimation notice on 19.03.2024.
  • The matter of tax on the seigniorage fee is pending before the Supreme Court and is kept in abeyance.

Final Outcome

  • The court found a prima facie case of turnover suppression and upheld the validity of invoking Section 74.
  • No procedural irregularity was identified in the respondent’s issuance of the impugned orders.
  • All three writ petitions are dismissed.
  • The petitioner is granted liberty to file a statutory appeal before the appellate authority within 30 days from receipt of the order copy.
  • If an appeal is filed, the appellate authority shall decide on merits without reference to limitation.
  • No costs are awarded; connected miscellaneous petitions are closed.

Topics: GST Enforcement, Judicial Review