In a recent ruling dated March 5, 2026, the Madras High Court addressed a dispute involving Ms Tirumala Milk Products Private Limited and the State Tax Officer. The case revolved around an order issued in Form GST DRC-07 for the tax period of 2018-19, which confirmed a tax demand exceeding the amount proposed in the initial Show Cause Notice. Initially, the department's Show Cause Notice in Form GST DRC-01 proposed a tax demand of approximately ₹1.37 crore. However, the final adjudication order increased this demand to about ₹2.41 crore.
The petitioner, aggrieved by this enhancement, sought the intervention of the Madras High Court to quash the order. The central issue was whether the GST adjudication order could confirm a demand higher than the proposed amount in the show cause notice. The Court highlighted that Section 75(7) of the CGST Act prohibits confirming a demand exceeding the amount proposed in the show cause notice.
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Consequently, the Court found the order to be legally impermissible and contrary to the statutory provisions of GST law. The High Court set aside the impugned order and remanded the matter to the tax authority for a fresh order, allowing consideration of the petitioner’s reply to the show cause notice.
Order Date - 05 March 2026
Parties : Ms Tirumala Milk Products Private Limited Vs The State Tax Officer Group I, Intelligence II Office of the Joint Commissioner (ST)IntelligenceII
Facts
- Tirumala Milk Products Private Limited challenged an order issued in Form GST DRC-07 dated 26.12.2025 for the tax period 2018-19, passed by the State Tax Officer.
- Earlier, the department had issued a Show Cause Notice in Form GST DRC-01 dated 26.06.2025, proposing a tax demand of about ₹1.37 crore.
- However, in the final adjudication order, the authority confirmed a much higher demand of about ₹2.41 crore, which exceeded the amount proposed in the notice.
- Aggrieved by the demand being enhanced beyond the scope of the show cause notice, the petitioner approached the Madras High Court seeking quashing of the order.
Issue -
- Whether a GST adjudication order confirming demand higher than the amount proposed in the show cause notice is valid?
Order -
- The Court noted that Section 75(7) prohibits confirming a demand that exceeds the amount proposed in the show cause notice.
- In the present case, the final order confirmed a tax liability significantly higher than the amount proposed in the notice, which was legally impermissible.
- Therefore, the Court held that the impugned order was contrary to the statutory provisions of GST law.
- The High Court set aside the order and remanded the matter to the tax authority to pass a fresh order after considering the petitioner’s reply to the show cause notice.
