Authority: High Court of Judicature at Madras

Order Date: 07-07-2026

Case Overview

  • Petitioners: WFB Baird and Company India Private Limited, represented by Dy.G.M. Sunil Nair.
  • Respondents: State Tax Officer I (Data Analytical Unit, Joint Commissioner ST – Intelligence, Erode Division), State Tax Officer (Inspection III, Erode), Appellate Deputy Commissioner (ST) – GST Appeals, Assistant Commissioner (ST) – Perundurai Circle, and the State of Tamil Nadu (Secretary, Department of Finance).
  • Writ petitions WP No. 24237 and WP No. 24239 (along with WMP Nos. 26376 & 26378) challenged two orders: an assessment order dated 08‑12‑2023 issued under GST Section 74 and a rejection order dated 06‑01‑2026 refusing a waiver of penalty under Section 128A of the TNGST Act, 2017 r/w CGST Act, 2017.
  • The petitioner argued that the Show‑Cause Notice dated 29‑09‑2023 was issued under Section 73, not Section 74, and that the assessment order improperly invoked Section 74, imposing a 100 % penalty without the statutory ingredients of that provision.
  • The Show‑Cause Notice identified three defects: defect 3 was dropped, defect 2 confirmed a small demand, and defect 1 related to reversal of excess Input Tax Credit (ITC). The notice called for explanation why the excess ITC should not be reversed, but contained no allegation of fraud, wilful misstatement, or tax evasion.
  • The summary order was headed “order under Section 73”, whereas the detailed order referenced Section 74 and imposed the penalty.

Final Outcome

  • The Court held that, per subsection (2) of Section 75 of the applicable GST enactments, the proceedings should have been initiated and concluded under Section 73, not Section 74.
  • Consequently, the impugned assessment order dated 08‑12‑2023 is set aside and the matter is remanded for issuance of a fresh order under Section 73.
  • The order dated 06‑01‑2026 rejecting the petitioner’s application for penalty waiver under Section 128A is also set aside.
  • The petitioner may now file a fresh application under Section 128A within the time limit prescribed in the forthcoming Section 73 order.
  • Both writ petitions are disposed of on these terms; related miscellaneous petitions are closed and no costs are awarded.

Topics: GST Assessment, Penalty Waiver, Judicial Review