In a recent ruling, the Madurai Bench of the Madras High Court quashed a GST demand issued in Form DRC-01D against a government contractor, after it was established that the entire admitted tax liability along with interest had already been paid.
The petitioner, M/s LRS and Co. had approached the Court challenging the order dated 18.12.2024 passed by the State Tax Officer under Section 79 of the TNGST Act, 2017 for the assessment year 2023-2024, seeking its quashment and proper appropriation of the amounts paid.
The petitioner contended that although there had been a delay in paying the admitted tax dues, the dues were subsequently paid in full, including interest.
It was further submitted that even before the issuance of the impugned DRC-01D order, 75% of the disputed tax liability had already been discharged and was reflected in the GSTR-3B returns. Despite these payments, the demand continued to stand unresolved on record, causing procedural hardship to the assessee.
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The respondent’s counsel, the Additional Government Pleader, confirmed that the entire admitted tax liability along with applicable interest had indeed been recovered post-facto.
The Court observed that since the payment had already been made, there was no justification for the continued existence of the DRC-01D demand on record.
Justice C. Saravanan thus quashed the impugned order and directed the jurisdictional officer to pass suitable appropriation orders, acknowledging the payments made and ordering refund of any excess amount, if applicable.
The Court instructed that such an order appropriating the amount be passed within a period of four weeks from the date of receipt of the judgment. With this direction, the writ petition was disposed of.The Court observed that since the payment had already been made, there was no justification for the continued existence of the DRC-01D demand on record.