Direct TaxFAOs And JAOs Have Concurrent Jurisdiction For Assessment, Re-assessment Or Re-Computation U/S 147 Income Tax Act: Madras High CourtCase Title: Mark Studio India Private Limited v. Income Tax Officer and OthersCase No: W.P.Nos.25223 & 25227 of 2024The Madras High Court recently clarified that both the Faceless Assessment Officer and Jurisdictional Assessment Officer have...
Direct Tax
Case Title: Mark Studio India Private Limited v. Income Tax Officer and Others
Case No: W.P.Nos.25223 & 25227 of 2024
The Madras High Court recently clarified that both the Faceless Assessment Officer and Jurisdictional Assessment Officer have concurrent jurisdiction as far as assessment, re-assessment or re-computation under Section 147 of the Income Tax Act.
Justice Krishnan Ramasamy made it clear that for issuance of notice under Section 148 of the IT Act, the JAO had exclusive jurisdiction. The court added that in matters of international taxation, central Circle charges and search and seizure cases also, the JAO had exclusive jurisdiction and the FAO, in such cases, did not have jurisdiction to make assessment, re-assessment or re-computation.
Case Title: M/s Sanmar Speciality Chemicals Limited v. The Assistant Commissioner of Income-Tax
Case Number: T.C.(A).No.493 of 2013
The Madras High Court while referring to sections 43B and 40A Income Tax Act explained which provision prevails when both commence with a non-obstante clause.
The Division Bench of Justices Dr. Anita Sumanth and G. Arul Murugan stated that “the Rule that a general provision should yield to specific provision springs from the common understanding that when two directions are given one encompassing a large number of matters in general and another to only some, the latter directions should prevail as being more specific in nature.”
Case Title: Vajra Global Consulting Service LLP v. Assistant Director of Income Tax
Case Number: W.P.No.18560 of 2023
The Madras High Court held that digital marketing is a business and not a profession; and an audit report is not required for turnovers below Rs. 5 crores.
Justice Krishnan Ramasamy stated that “Digital Marketing is the business for persons who carry out the said activities. In the event anybody carrying on the business of Digital Marketing with cash transactions both on the aspect of receipts and payments in cash below 5% of the turnover, which is below Rs.5 Crores as per the proviso to Section 44 AB (a), the said assessee is not required to file an audit report and they are exempted.”
Case Title: M/s Arul Industries v. The Asst. Commissioner of Income Tax
Case Number: TCA No.340 of 2016
The Madras High Court stated that the Income Tax commissioner cannot revise an assessment merely because detailed reasoning was not given in the order.
Chief Justice Manindra Mohan Shrivastava and Justice Sunder Mohan stated that, "an order cannot be termed as erroneous unless it is not in accordance with law. If the Income Tax Officer, acting in accordance with law, makes certain assessment, the same cannot be branded as erroneous by the Commissioner, simply because, according to the Commissioner, the order should have been written more elaborately."
Case Title: D. Tamilselvi v. The Income Tax Officer
Case Number: W.P.(MD)Nos.30938
The Madras High Court has held that under the new regime, approval from a higher authority, such as the Principal Chief Commissioner of Income Tax or the Principal Director General, is mandatory to issue a notice under Section 148 of the Income Tax Act after the expiry of a three-year limitation period.
Justice C. Saravanan stated that …three years from the end of the Assessment Year 2016-2017, 2017-2018 and 2018-2019, to issue Section 148 Notice under the new regime had already expired on 31.03.2020, 31.03.2021 and 31.03.2022. However, Section 148 Notices were issued for these Assessment Years only on 29.07.2022 with approval from the Principal Commissioner instead of approval from the Principal Chief Commissioner in terms of amended provisions as in force for the period in dispute were in time…
Case Title: Sivestar Educational Trust v. Commissioner of Income Tax (Exemption)
Case Number: W.P.No.6814 of 2025
The Madras High Court held that delay in filing Form 10B required under Section 44AB for the purpose of Section 12A(1)(b) of the Income Tax Act, 1961, is not a ground to deny legitimate exemption tax exemptions.
Justice C. Saravanan observed that the assessee was registered as a “Trust” in the year 2017. Effectively, the assessee would have carried on operation as a “Trust” from 01.04.2017 onwards, which would fall under the Assessment Year 2018-2019.
Case Title: M/s. Lucky Footwear Components v. The Authorized Officer, Indian Bank
Case Number: C.R.P.No.5237 of 2025
The Madras High Court held that an auction under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) Act, 1957, is valid when the property is valued by a valuer and registered under Section 34AB of the Wealth-Tax Act.
Chief Justice Mohan Shrivastava and G. Arul Murugan opined that out of the two valuation reports placed before the Tribunal, if the Tribunal has accepted the valuation made by approved valuer, registered under the provision of Wealth-Tax Act, it cannot be said to be patently illegal or perverse so as to interfere in the exercise of supervisory jurisdiction under Article 227 of the Constitution of India.
Case Title: M/s. Hinduja Foundries Ltd. v. The Assistant Commissioner of Income Tax
Case Number: TCA Nos.794 and 795 of 2016
The Madras High Court has held that depreciation on payment to State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT) for infrastructure development is not allowed, but the assessee is eligible for 5% annual revenue deduction.
Chief Justice Manindra Mohan Shrivastava and G. Arul Murugan were addressing the appeal pertaining to the claim of depreciation on the sum paid to the State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT) for the development of infrastructural facilities.
Madras High Court Orders New PAN For Assessee After Dept-Issued Duplicate PAN Ruins CIBIL Score
Case Title: S. Senthil v. The Commissioner of Income Tax
Case Number: W.P.No.21548 of 2022
The Madras High Court has directed the department to issue a fresh PAN (Permanent Account Number) to the assessee, who suffered adverse consequences because the defaulter holding the same PAN had a bad CIBIL. The bench held that the assessee cannot be made to bear serious CIBIL consequences arising from the Income Tax Department's duplicate PAN allotment.
Justice C. Saravanan stated that the PAN that was allotted to the assessee on 18.05.2007 was also erroneously allotted to the said person, namely Subramaniyan Senthil S/o. Subramaniyan. Although the said person has been given a new identity, the mistakes committed by the said person have affected the assessee, as the identity of the assessee and his financial transactions are traceable to the PAN that was originally allotted to the assessee on 18.05.2007, which is in the cloud.
Case Title: Cognizant Technology Solutions India Private Limited v. Commissioner of Income Tax
Case Number: TCA Nos.277 to 280 of 2016
The Madras High Court has held that payment for IPLC (International Private Leased Circuits) Services does not constitute 'royalty' under Section 9 of the Income Tax Act, and that the assessee is entitled to a deduction under Section 40(a)(i) of the Income Tax Act.
Chief Justice Manindra Mohan Shrivastava and Justice Sunder Mohan examined whether the payment made by the assessee for IPLC services constitutes 'royalty' under Section 9 of the Income Tax Act, and whether the assessee is entitled to claim a deduction under Section 40(a)(i) of the Act, in respect of a payment made to a foreign-based company.
Case Title: M/s. Devaraj & Others v. The Income Tax Officer
Case Number: TCA Nos. 319 of 2016 and 538 of 2021
The Madras High Court has held that the rectification power under Section 254(2) of the Income Tax Act is akin to the review power under Order 47 Rule 1 CPC and is limited to rectifying any mistake apparent on the face of the record. The Tribunal cannot re-adjudicate issues or modify its original order under the guise of rectification.
Chief Justice Manindra Mohan Shrivastava and Justice G. Arul Murugan stated that when the power under section 254(2) is akin to Order 47 Rule 1 of CPC, the scope and ambit of rectification/review could be only within the contours provided under the provision. When the provision only allows for rectification for any errors apparent on the face of the record, the mistake should be discernible on the face of the record without requiring any elaborate enquiry or reasoning. In the garb of rectification, the issue cannot be re-adjudicated, and a fresh order cannot be passed effacing the original order, which is clearly impermissible.
Case Title: Jasmine Towels (P) Ltd. v. Asst. Commissioner Of Income Tax
Case Number: TCA No. 394 of 2012
The Madras High Court held that reassessment under Section 147 of the Income Tax Act is valid if the original order is completely silent on the assessee's claim for deduction under Section 80HHC of the Income Tax Act.
Justices Anita Sumanth and Mummineni Sudheer Kumar stated that the original order of assessment is wholly silent in regard to the claim under Section 80HHC. Normally, when an order of assessment is passed under Section 143(3) of the Act, there is a presumption that the issues raised for consideration in the return of income have been duly taken note of by the Assessing Officer.
Case Title: Shri. Harigovind v. Assistant Commissioner Of Income Tax Non-corporate
Case Number: W.P.Nos.23014 of 2023
The Madras High Court held that the notices under Section 153C are unsustainable where a search for 'other person' was initiated after 01.04.2021.
Justice Krishnan Ramasamy stated that the first proviso to Sub-Section (1) of Section 153C is not only for the purpose of abatement but also for all other purposes, viz., initiation of search for other person in terms of Section 153C(3) of the Act. In such a case, the date of initiation of search for the assessee is the date on which the documents were handed over to the JAO of the assessee, i.e., 25.11.2022 is the date of initiation of search for the assessee.
Case Title: The Dharmapuri District Co-operative Milk Producers Union Ltd. v. The Deputy Commissioner of Income Tax
Case Number: T.C.A.No.285 of 2021
The Madras High Court held that the grant-in-aid/subsidy received by the assessee under a government rehabilitation scheme is a capital receipt and is not taxable as revenue.
Chief Justice Manindra Mohan Shrivastava and G. Arul Murugan examined whether the grant-in-aid/subsidy received by the assessee from the Government under the rehabilitation scheme should be treated as a revenue receipt in the hands of the assessee or as a capital receipt, taking it out of the purview of the taxable income.
Case Title: K.M. Mammen v. The Principal Commissioner of Income Tax
Case Number: W.P. No. 24029 of 2025
The Madras High Court held that once the assessee's entitlement to compounding had attained finality through earlier orders, then the Income Tax Department could not apply the revised Compounding Guidelines.
Justice C. Saravanan referred to the Explanation to Section 279(6) of the Income Tax Act, 1961 and noted that the new compounding Guidelines dated 17.10.2024 bearing reference F.No.285/08/2014-IT (Inv.V) would apply, only if a new application is/was filed in terms of paragraph 3.2 of the said guidelines.
Indirect Tax
What Constitutes Valid Service Of Notice U/S 169 Of CGST Act? Madras High Court Clarifies
Case Title: Udumalpet Sarvodaya Sangham v. The Authority
Case Number: W.P.(MD)Nos.26481
The Madras High Court interpreted Section 169 of Central Goods and Services Tax Act, 2017 and stated that Section 169 mandates a notice in person or by registered post or to the registered e-mail ID alternatively and on a failure or impracticability of adopting any of the aforesaid modes, then the State can, in addition, make a publication of such notices/ summons/ orders in the portal/ newspaper through the concerned officials.
The Bench of Justice K. Kumaresh Babu observed that “when the Statute had also mandated issuance of notice in person/ registered post/ e-mail, etc., the Rules cannot be limited to only serving it through electronic modes.”
GST Registration And Payment Of Tax After Inspection Is Not Voluntary Conduct: Madras High Court
Case Title: M/s.Annai Angammal Arakkattalai v. The Joint Commissioner or GST (Appeals), Coimbatore
Case Number: W.P.(MD)No.28502 of 2022
The Madras High Court stated that GST registration and payment of tax after inspection is not a voluntary conduct.
The Bench of Justice K. Kumaresh Babu observed that “there is a deliberate attempt to evade payment of tax by not registering himself under the Act and also issuing receipts as donation to the Trust. Only after the inspection they have agreed to pay the tax by registering themselves. This conduct cannot be said to be a voluntary conduct.”
Case Title: Thanushika v The Principal Commissioner of Customs (Chennai)
Case No: W.P.No.5005 of 2024
The Madras High Court has recently criticised a Seizing Officer attached to the office of the Principal Commissioner of Customs for seizing a gold “Mangalya Thali Kodi” (necklace) from a Srilankan citizen alleging that the same was against the Baggage Rules 2016.
The court observed that the quantity of jewellery worn by the petitioner was normal for a newly married person and that the officers, while conducting searches should respect the customs of every religion in the country. The court also noted that it was unfair on the part of the officer to remove the petitioner's thali and such act was intolerable.
Case Title: Tvl. Chennais Pet v. The State Tax Officer
Case Number: W.P.(MD)No.3995 of 2025
The Madras High Court stated that appeal can't be dismissed due to procedural delay, when assessee has complied statutory requirements including pre-deposit.
“The appeal should not be dismissed merely due to a procedural delay, especially when the petitioner has made an effort to comply with the statutory requirements, including the pre-deposit of 10% of the tax liability and additional payments towards the disputed tax amount” stated the bench of Justice Vivek Kumar Singh.
Case Title: M/s.United Breweries Limited v. The Joint Commissioner of GST and Central Excise (Appeals II)
Case No: W.P.No.14080 of 2021
The Madras High Court has recently observed that the supply of holographic stickers or excise labels by the Prohibition and Excise Department which is to be affixed on manufactured and bottles alcoholic liquor is a supply of “goods” simplicitor and not a supply of “service”.
The court thus ruled that such supply of holographic stickers would not be taxable under the GST enactments. Justice C Saravanan noted that the holographic sticker was a label and therefore a good within the meaning of Section 2(52) of the CGST Act and the supply of label by the department had to be construed as a supply of “goods” and not a supply of “service”.
Case Title: Gillette Diversified Operations vs. Joint Commissioner of GST and Central Excise
Case Number: W.P.Nos.6524, 6527, 6531, 6537 and 6541 of 2022
Finding that the refund claim was filed within two years from the “relevant date” as defined in Explanation 2(a) to Section 54(14) of CGST Act , the Madras High Court recently clarified that a refund claim cannot be denied on the basis of retrospective operation of the Proviso to Rule 90(3) pf the CGST Rules.
The High Court clarified this upon finding that the refund claims filed in the portal on Sep 21, 2018, Oct 09, 2018 and Oct 10, 2018, were within two years from the date of exports made during July 2017, August 2017 and September 2017, in time in terms of Circular No. 79/53/2018-GST.
Case Title: STS-KEC(JV) v. The State Tax Officer
Case Number: W.P.(MD). Nos. 3938 to 3942 of 2024
The Madras High Court stated that the works contract for track doubling and infrastructure under RVNL is liable to 12% GST.
Justice Mohammed Shaffiq stated that “it may be relevant to keep in mind that while exemption notifications must be strictly construed, it certainly would not mean that the scope of the exemption notification can be curtailed by importing conditions or giving an artificially restrictive meaning to the words in an exemption notification.”
CENVAT Credit Can't Be Denied Merely On Non-Submission Of User Test Certificate: Madras High Court
Case Title: The Commissioner of CGST & Central Excise v. Kothari Sugars and Chemicals Ltd.
Case Number: W.A.(MD). Nos. 557 to 568 of 2024
The Madras High Court stated that user test certificate is not mandatory before adjudicating show cause notice.
The Division Bench of Justices R. Suresh Kumar and G. Arul Murugan opined that show cause notices cannot be adjudicated merely on the ground that the User Test Certificate has not been produced by the assessee.
Case Title: Transasia Bio-Medicals Ltd. v. Union of India
Case Number: W.P.Nos.28380 & 28388 of 2018
The Madras High Court stated that goods imported exempted from basic customs duty, may still be subject to levy of additional duty under respective enactments.
“The goods imported, even though exempted from basic customs duty, may still be subject to levy of additional duty under the respective enactments and they would be so subject unless and until they are specifically exempted by the competent authority in exercise of the powers vested under those respective enactments from such additional duty” stated the bench comprising of Chief Justice K.R. Shriram and Justice Mohammed Shaffiq.
Case Title: M/s. Poomika Infra Developers v. State Tax Officer
Case Number: W.P. Nos.33562
In a recent ruling, the Madras High Court held that service of notices and orders through Common portal is a valid mode of service in terms of Section 149 of the GST Act. The bench rejected the argument that the GST portal is not a “designated computer resource of the assessee” and hence as per Sec. 13 (2) (a) (ii) of the Information Technology Act, receipt occurs only when the communication is retrieved.
“Service by making it available in the common portal is a valid mode of service in terms of Section 169 of the GST Act. Service is complete when it enters the common portal i.e., when it is made available in the common portal,” stated the bench of Justice Mohammed Shaffiq.
Case Title: M/s. Axiom Gen Nxt India Private Limited v. Commercial State Tax Officer
Case Number: W.P.No.1114 of 2025
The Madras High Court stated that if the taxpayer is not at all participating in the proceedings, even after repeated uploading of notices and reminders in GST portal, the Department should have resorted to other mode of service, viz., Registered Post with Acknowledgement Due (RPAD), so that considerable time of officers, assessee and the Court could be saved. The court extensively referred to the provisions of the Information Technology Act and concluded, while service through portal is “sufficient” service, it is not “effective" service”.
The Bench of Justice Krishnan Ramasamy stated that “once if no response was received for the notices, viz., ASMT-10, DRC-01A, DRC-01, etc., which were uploaded in the common portal by the department, atleast they have to send the subsequent reminders by way of RPAD. If anyone notice is received by the assessee, he cannot make a plea that they were unaware of the notices, which were uploaded in the common portal.”
Case Title: Tai Industries Ltd. v. The State of Tamilnadu
Case Number: W.A.No.474 of 2021
The Madras High Court stated that Article 304 of the Constitution applies only to goods imported from other states or union territories and not to goods imported from outside India.
The Division Bench consists of Chief Justice K.R. Shriram and Justice Mohammed Shaffiq looked into the case of State of Kerala and others v. Fr. William Fernandez and other, (2021) 11 SCC 705 and observed that the goods imported after having been released from customs barriers are not immune from any kind of State taxation. The States are free to levy taxes on goods imported into the State.
Case Title: Indian Bank v. The Commercial Tax Officer
Case Number: W.P.Nos.31572
The Madras High Court stated that provisions of Section 26E of the SARFAESI Act and Section 34 of the Recovery of Debts and Bankruptcy Act would prevail over the provisions of Section 24 of the Tamil Nadu General Sales Tax Act.
The Division Bench of Justices Anita Sumanth and G. Arul Murugan observed that “in the juxtaposition of Section 26E of the SARFAESI Act with Section 34 of the RDB Act, it is Section 26E of the SARFAESI Act that will provide the necessary impetus for determining the priority of a charge of security interest in favour of the Financial Institution, as Section 34 of the RDB Act is, by comparison, only a general provision.”
Case Title: M/s. Adyar Gate Hotel Ltd. v. The Commissioner of Customs
Case Number: C.M.A. Nos.71 & 131 of 2025
The Madras High Court stated that customs department bound by DGFT's classification of capital goods under EPCG scheme (export promotion capital goods scheme).
The Division Bench consists of Justices Anita Sumanth and N. Senthilkumar observed that “there is no justification in the Department having made the assessee litigate the issue needlessly despite the CBEC having categorically confirmed as early as in 2002 that the Customs Department must align with the stand of the DGFT and DG (Tourism) in matters of imports by hotels. The licence where the imports have been classified as 'capital goods' has not been revoked or withdrawn and it is nobody's case that the licence has been obtained on a wrongful or fraudulent basis.”
Case Title: The State of Tamil Nadu v. Tvl. Aro Granite Industries Ltd.
Citation: 2025 LiveLaw (Mad) 230
The Madras High Court has stated that the assessing authority is not bound by the appellate tribunal's observations in a De Novo assessment.
Justices Anita Sumanth and N. Senthilkumar opined that while concluding the assessment de novo, the assessing authority is not bound by the observations made by the first appellate authority.
Case Title: M/s. Eminent Textiles Mills Private Limited v. The State Tax Officer & Ors.
Case Number: W.A(MD) No.1821 of 2025 and C.M.P.(MD)No.10304 of 2025
The Madras High Court stated that the GST authority can dismiss the rectification application without a personal hearing. The issue before the bench was whether the third proviso to Section 161 of the TNGST Act, 2017, requires complying with the principles of natural justice even for dismissing a rectification petition.
The Bench of Justices G.R. Swaminathan and K. Rajasekar observed that “When the rectification application is dismissed as such without there being anything more, the original order stands as such. In that event, there is no rectification at all. When there is no rectification, there is no question of invoking the principles of natural justice.”
Case Title: Chandrasekaran Proprietor Subha Earth Movers v. Assistant Commissioner
Case Number: W.P.No.30638 of 2025
The Madras High Court has directed the department to issue a circular urging assessees to engage only qualified consultants for GST compliance.
Justice Krishnan Ramasamy stated that, "This Court comes across similar instances in several cases, extending ill advice to the clients by the consultants, who are all not qualified persons. Such kind of ill-advice leads to the fact that the clients are not in a position to appear before the Officers concerned with suitable reply supported by documents, which is purely on the negligence on the part of the consultant."
Case Title: M/s.Sivakumar and Co., Perundurai Road, Erode v. The Tamil Nadu Sales Tax Appellate Tribunal
Case Number: W.P.No.33265 of 2007
The Madras High Court has held that if the assessee has purchased goods both within the State and from other States, then to claim exemption for inter-State purchases, the purchases made within the State must be segregated from those made from others.
Justices S.M. Subramaniam stated that when the facts are established in clear terms that the goods were found mingled during the course of physical verification/inspection, the decision of the assessing Authority and the appellate Tribunal that the assessee is not entitled for exemption, is correct and in consonance with the provisions of the exemption Order.
Case Title: M/s. Inalfa Gabriel Sunroof Systems Pvt. Ltd. v. Customs Authority for Advance Ruling, Mumbai
Case Number: C.M.A.No.2553 of 2025
The Madras High Court has held that the scope of appeal is limited under Section 28KA of the Customs Act and an advance ruling is binding unless it is palpably arbitrary or irrational.
Justices S.M. Subramaniam and C. Saravanan stated that the scope of appeal under Section 28KA of the Customs Act, 1962, is limited, as the ruling obtained is binding on the persons mentioned in Section 28J of the Customs Act, 1962. Unless the ruling of the Authority is palpably arbitrary or irrational or without any proper reasoning, they cannot be interfered by this Court under Section 28KA of the Customs Act, 1962.
No Tax Exemption On Bakery Products Sold At Snack Bar: Madras High Court
Case Title: Cakes N Bakes v. The Commercial Tax Officer
Case Number: W.P.No. 19651 of 2007
The Madras High Court held that there is no tax exemption for bakery products sold in a snack bar.
Justices S.M. Subramaniam and C. Saravanan were addressing the issue of whether bakery products sold in a snack bar are covered under the notification G.O.P.No.570 dated 10th June 1987 and exempted from tax.
Case Title: P. Balasubramaniam v. The Appellate Tribunal for Foreign Exchange
Case Number: W.A.Nos.12 and 57 of 2023
The Madras High Court stated that the FERA (Foreign Exchange Regulation Act) penalty under Section 50 is not applicable for export shortfall below 10%; the exporter can write off unrealised bills.
Justices S.M. Subramaniam and C. Saravanan stated that even otherwise, since Section 18(1)(a) of the Foreign Exchange Regulation Act is to be read along with Section 18(2) and Section 18(3) of the Foreign Exchange Regulation Act, penalty under Section 50 of the Foreign Exchange Regulation Act is not applicable to the facts and circumstances of the case as admittedly the Appellants/Exporters had failed to realize approximately 5.45% of the export proceeds.
Case Title: M/s. ACS Shipping & Logistics v. The Commissioner of Customs
Case Number: W.P(MD)No.4416 of 2022
The Madras High Court stated that the offence report under Regulation 17(1) Customs Brokers Licensing Regulations, 2018, need not necessarily have a penal connotation. Also, it stated that the 90-day limitation period begins only upon receipt of the offence report.
The bench stated that, "the offence report must be received by the office of the licensing authority, and the limitation period will start running only from the date of its receipt. Even if the licensing authority can be attributed with knowledge in this regard, that would not count for the purpose of limitation. It is the date of receipt of the offence report that is material. Such an interpretation alone would be in consonance with the text of Regulation 17."
Customs Authorities Lack Jurisdiction To Issue Directions Under GST Law: Madras High Court
Case Title: National Association of Container Freight Stations v. The Joint Commissioner of Customs
Case Number: WP No. 11222 of 2022
The Madras High Court recently held that Customs authorities have no jurisdiction to issue directions under the Goods and Services Tax (GST) law. The Court struck down a February 2021 public notice issued by the Chennai Customs that sought to regulate the GST treatment on auctioned cargo.
A single bench of Justice N Anand Venkatesh ruled that such powers lie exclusively with authorities designated under the GST Act. "It is not known as to where the 1st respondent gets the power and jurisdiction to issue a Public Notice directing the custodians not to collect GST. This direction given by the 1st respondent certainly does not fall within the domain of the customs authorities."
TNGST Act | Purchase Tax Cannot Be Levied on Buyer for Seller's Tax Default: Madras High Court
Case Title: Light Roofings Ltd. v. The Tamil Nadu Sales Tax Appellate Tribunal
Case Number: W.P. Nos.19625
The Madras High Court on Monday held that purchase tax cannot be levied under Section 7A of the Tamil Nadu General Sales Tax Act, 1959 (TNGST Act) on the purchaser merely because the seller failed to pay tax.
The bench, comprising Justices S M Subramaniam and Mohammed Shaffiq, clarified the scope of Section 7A in transactions where the vendor has defaulted on tax payments. "Having found that the sale to petitioner is liable to tax in the hands of the petitioner's vendor, levy of purchase tax only on the premise that petitioner's vendor had not remitted tax cannot be sustained. If petitioner's vendor fails to remit appropriate tax, Revenue ought to proceed against the petitioner's vendor, instead any levy of purchase tax by the respondent would be bad for want of jurisdiction and cannot be sustained", it said.
Case Title: M Divya vs The Senior Revenue Officer
Case Number: W.P.No.10194 of 2025
The Madras High Court has recently ruled that hostels providing accommodation to working men and women are residential properties and, therefore, property tax, water tax, and electricity charges cannot be levied at commercial rates.
The ruling came in response to petitions filed by hostel owners in Chennai and Coimbatore challenging Chennai municipal authorities and the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) for reclassifying their hostels from residential to commercial premises and demanding significantly higher taxes.
Case Title: Neeyamo Enterprise Solutions Pvt. Ltd. v. The Commercial Tax Officer
Case Number: WP(MD)Nos.30453
The Madras High Court has held that using the word 'Determined' in the show cause notice (SCN) betrays an element of pre-determination on the part of the authority. The bench highlighted that the show cause notice must clearly specify whether the assessee is being charged with fraud, suppression or wilful misstatement to invoke section 74 of the Tamil Nadu Goods and Services Tax Act, 2017.
The bench stated that the authority has used the word “determined”. There is an ocean of difference between specifying something and determining something. The word “determined” found in the show cause notice cannot be construed as “specified”.
Case Title: M/s. Parry Enterprises India Limited v. The Additional Commissioner of Customs
Case Number: W.P.Nos.17912 of 2023
The Madras High Court has held that once CESTAT has classified wheat gluten as eligible for DFIA (Duty-Free Import Authorisation) exemption, Customs authorities are bound by those findings and cannot independently deny the exemption benefits.
Justice N. Anand Venkatesh stated that the impugned orders have been passed only on the ground that Wheat Gluten is not covered under the DFIA Licence and, therefore, the assessee is not eligible to claim exemption. If the CESTAT has already taken a view that Wheat flour and Wheat Gluten fall under the same classification, the entire proceedings of the respondent cannot be sustained, since all the other findings hinge upon only this issue.
Case Name: MRF Limited vs. Additional Director, DGGI
The Madras High Court has quashed Show Cause Notices issued to Apollo Tyres Limited and MRF Limited alleging wrongful availment of Input Tax Credit (ITC) for the composite supply of Tyres, Tubes and Flaps (TFF) since tax difference was paid voluntarily.
In twin judgments dated November 28,2025, Justice Krishnan Ramasamy examined if Show Cause Notice had fulfilled the ingredients of Section 74 to hold that payment deferred due to confusion prevailing confusion in the industry regarding tax treatment of TFF is not attributable to tax evasion.