Madras HC Lifts GST Bank Freeze on Trader With ₹82.7 Lakh Turnover Below ₹1 Crore Composition Limit, Orders Fresh Section 73 Decision

The petitioner challenged an assessment order dated 10 December 2025 under Section 74 of the GST Act and a consequential bank-account attachment notice dated 12 March 2026.

The dispute concerned FY 2018–19, when the petitioner’s turnover was ₹82,74,520.

The petitioner contended that Notification No. 46/2017 dated 13 October 2017 had raised the composition-scheme turnover limit from ₹75 lakh to ₹1 crore, but the show-cause notice had applied the former limit.

The respondent maintained that the petitioner had exceeded the applicable ₹75 lakh limit and had paid tax under the composition levy.

Notification No. 46/2017 dated 13 October 2017 raised the relevant turnover limit from ₹75 lakh to ₹1 crore.

The Court further held that, even assuming the petitioner’s turnover exceeded the applicable threshold, proceedings in the circumstances could be initiated only under Section 73, and not Section 74 of the GST Act.

The petitioner’s turnover of ₹82,74,520 was below the ₹1 crore limit prescribed by the notification. The show-cause notice’s reliance on the superseded ₹75 lakh limit, followed by an assessment under Section 74, therefore reflected non-application of mind.

Separately, the Court held that even if the threshold had been exceeded, Section 74 was wrongly invoked; the matter was to be reconsidered under Section 73.

Because the assessment order was set aside, the consequential bank attachment could not remain in force.

It directed the petitioner to file its reply and supporting documents within two weeks; thereafter, the respondent was to give 14 days’ clear notice fixing a personal hearing and pass a fresh order under Section 73 on the merits and in accordance with law.

The Court also directed the concerned bank to defreeze the petitioner’s account upon production of the order.

The writ petition was disposed of without costs.