Facts of the Case

The petitioner, proprietor of Tvl. Ramya Sewings, had opted to pay tax under the Composition Scheme provided under Section 10 of the CGST/TNGST Act, 2017. Despite this, the respondent raised a demand contrary to the petitioner's entitlement under the Composition Scheme, confirming the proposal made in a show cause notice in Form GST DRC-01 dated 29.03.2025 by an assessment order dated 03.06.2025 for the tax period April 2021-March 2022. The petitioner challenged this order before the Madurai Bench of the Madras High Court.

Issues Involved

  1. Whether a GST demand raised against a taxpayer who has opted for the Composition Scheme under Section 10, but computed contrary to that entitlement, can be sustained.
  2. Whether the matter should be remitted for a fresh order in light of the Court's recent orders in similar composition-scheme matters.

Petitioner's Arguments

  • The petitioner had opted to pay tax under Section 10 of the GST enactments (Composition Scheme), but the demand raised was contrary to this entitlement.
  • The impugned order is without merit and liable to be quashed.
  • Similar orders were passed by this Court on 21.08.2025 and 22.08.2025 in comparable composition-scheme matters.

Respondent's Arguments

  • The petitioner has an alternate remedy by way of statutory appeal, and the writ petition is liable to be dismissed on that ground.

Court Order / Findings

  • Taking note of its own recent orders in W.P(MD)No.22854 of 2025 and W.P(MD)No.22901 of 2025 on similar facts, the Court quashed the impugned order and remitted the matter to the respondent for a fresh order.
  • The petitioner was directed to file a reply to the show cause notice within thirty days, with the quashed order to be treated as an addendum to the SCN.
  • The respondent was directed to pass a fresh order on merits as expeditiously as possible after hearing the petitioner.
  • It was clarified that failure to comply within the stipulated time would be deemed as if the writ petition was dismissed, leaving the department free to proceed under the GST enactments.

Important Clarification

  • A GST demand that disregards a taxpayer's Composition Scheme entitlement under Section 10 is liable to be set aside and remanded for a fresh, merits-based order, notwithstanding the availability of an alternate statutory appellate remedy, where the Court has already taken a consistent view in a series of connected matters.

Sections Involved

  • Section 10, CGST Act, 2017 – Composition levy scheme for eligible small taxpayers.
  • Form GST DRC-01 – show cause notice preceding the demand.

Decision – In Favour of

Disposed of in favour of the Assessee; the impugned order was quashed and the matter remitted for a fresh order after considering the petitioner's Composition Scheme entitlement.

Case Details

Madurai Bench of Madras High Court; W.P(MD)No.22962 of 2025 with W.M.P(MD)Nos.18056 and 18057 of 2025; Coram: Hon'ble Mr. Justice C. Saravanan; Order dated 25.08.2025.

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