The Madras High Court addressed the issue of whether writ petitions are suitable for resolving disputes involving GST classification, jurisdiction, and the invocation of Section 74. The case involved Tvl. Dr. M. Sundaram Hospital Pvt. Ltd., which provided healthcare services and operated a medical shop. Following an inspection, the State Tax Officer issued notices alleging wrongful ITC usage, leading to assessment orders. The hospital contested the jurisdiction and argued that the proceedings should fall under Section 73 instead of Section 74.
The Court determined that classification issues involve disputed facts unsuitable for writ jurisdiction, which requires factual adjudication appropriate for appellate forums. Regarding jurisdiction, the Court upheld the principle of cross-empowerment under GST, allowing both Central and State authorities to initiate enforcement actions. On the invocation of Section 74, the Court advised that challenges should be directed to the appellate authority rather than through writ petitions.
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The Court supported the Single Judge's decision to dismiss the writ while allowing the petitioner to appeal under Section 107, where all issues, including jurisdiction and the absence of mens rea, could be addressed. This decision underscores the importance of utilizing proper appellate channels for complex GST disputes.
Order Date – 02 April 2026
Parties: Tvl. Dr. M. Sundaram Hospital Pvt. Ltd. Vs State Tax Officer-II
Facts –
- Tvl. Dr. M. Sundaram Hospital Pvt. Ltd., a private hospital, provided healthcare services along with running a medical shop within its premises and was registered under Central GST authorities.
- Based on an inspection conducted on 13.08.2024, the State Tax Officer issued show cause notices and passed assessment orders (Nov–Dec 2025) alleging wrongful ITC usage.
- The hospital argued that there was no fraud or suppression, hence proceedings should fall under Section 73, not Section 74, and also questioned State authority’s jurisdiction.
- The Single Judge dismissed the writ but allowed the petitioner to file an appeal, leading to the present writ appeals before the High Court.
Issue –
- Whether writ petitions are maintainable when disputes involve classification, jurisdiction, and invocation of Section 74 under GST?
Order –
- The Court noted that classification issues involve disputed facts, which cannot be examined under writ jurisdiction. Such matters require detailed factual adjudication, best suited for appellate forums.
- On jurisdiction, the Court relied on the principle of cross-empowerment under GST, holding that both Central and State authorities can initiate enforcement actions, even if the taxpayer is administratively assigned to one authority.
- Regarding invocation of Section 74 (fraud/suppression), the Court observed that if the taxpayer believes it was wrongly invoked, the appropriate remedy is to challenge it before the appellate authority, not through writ.
- The Court upheld the Single Judge’s view that the petitioner was rightly given liberty to appeal under Section 107, and all grounds—including jurisdiction and absence of mens rea—can be raised there.
