Madras HC Sets Aside GST Orders, Remands Case After Officer Overlooks Company’s Reverse-Charge Correction

In brief

The question

1. Whether the assessment, rectification and appellate orders were liable to be set aside for failing to consider the petitioner’s claimed correction of its GSTR-1 reporting error.

The court held

The Court set aside the assessment order dated 19 December 2025, the rectification order dated 4 March 2026, and the appellate order dated 16 July 2026, and remanded the matters to the Assessing Authority.

It also directed

The Authority was directed to issue fresh notice, verify the GSTR-1 amendments and GSTR-9 returns, provide the petitioner a sufficient opportunity of hearing, and pass a reasoned order on merits and in accordance with law within eight weeks of receiving the order.

The writ petitions were disposed of without costs.

01Facts

The petitioner challenged an assessment order dated 19 December 2025 under Section 73 of the CGST/TNGST Act, 2017, a rectification order dated 4 March 2026, and an appellate order dated 16 July 2026.

pp. 1–2, 4–5

It submitted that, while filing GSTR-1 for FY 2020–21, it had inadvertently reported tax liability under the reverse charge mechanism and later sought to correct the error through amended returns filed in September 2021.

p. 3

The petitioner contended that the authorities had failed to consider its returns and supporting details.

p. 3

The State’s counsel fairly suggested that the matters be remanded for fresh consideration.

p. 3

02Issues

i.1. Whether the assessment, rectification and appellate orders were liable to be set aside for failing to consider the petitioner’s claimed correction of its GSTR-1 reporting error.

pp. 3–5

ii.2. Whether the matter should be remanded to the Assessing Authority for fresh adjudication after verification of the petitioner’s returns and after affording it an opportunity to be heard.

pp. 3, 5–6

03Law Applied

The Court considered the assessment under Section 73 of the CGST/TNGST Act, 2017, and the petitioner’s claim that the relevant GSTR-1 correction and GSTR-9 filing were permissible under law.

p. 1, 4

It applied the principle that an assessment decision must consider relevant material and reflect application of mind; where the authority has overlooked a material claim, the resulting order may be set aside and remitted for fresh, reasoned consideration.

Provisions in the judgment · 1 · Linked ones open on LawLens

Central Goods and Services Tax Act, 2017 Section 73

04Reasoning

The Court noted that the dispute concerned the petitioner’s claim that it had mistakenly reported a supply under the reverse charge mechanism for FY 2020–21 and had sought to rectify the entry through subsequent filings.

p. 4

It found that the Assessing Officer had completely overlooked that aspect, rendering the impugned orders affected by patent non-application of mind.

p. 4

In light of that defect, and the State’s submission supporting remand, the Court considered fresh adjudication appropriate.

pp. 3–5