TaxTMI 
TaxTMI 
Despite the fact that the GSTAT is in place as on date and already more than 34,000 orders having been appealed before GSTAT, the jurisdictional high courts are still required to handle writs on GST matters and not in a position even in June 2026 to reject the writ quoting the availability of efficacious alternate remedies. Let us examine the story of a small retail trader situated at a remote location in Tirunelveli district. The story begins with issuance of DRC 01A under section 74A for the year 2024-25. However, the demand order stood passed on 13/01/2026 under section 74. The beauty of the case is section 74 has active life only for cases pertaining up to 2023-24.
It is a basic and fundamental fact that 73, 74 and 74A are all mutually exclusive to each other and for any particular financial year, any one of these three sections only fit. In case an officer is unaware of this requirement, Commissioner may identify such officers which facts are in public domain when writs are disposed by jurisdictional high courts and send them for compulsory training for at least four weeks. This shall facilitate the taxpayers to avoid writs which is forced on the taxpayer purely due to ignorance of law by the GST officer.
It was argued before the High Court by the respondent (Department) that it was an inadvertent error. Be that as it may. The adjudication order being passed by a state tax officer is a legal document which can -not afford to have any sort of error and the claim that it happened inadvertently only shows how casually and carelessly that order was passed. There was sufficient time to pass that order and 13/01/2026 was not a stipulated last date to pass that order.
The next line of argument was that the officer was aware of applicability of section 74A in the instant case and DRC 01A was issued accordingly. If one officer, at the rank of State Tax Officer has initially invoked 74A and concludes order on 74, a doubt may arise as to whether that officer was having a sharp mind at that time of passing the order, as he had ample opportunity to check the correctness before signing and releasing.
Accordingly, the arguments that invocation was correct, inadvertent error etc. before the high court are cover up only and it only gives a bad image to the readers of the high court order on the poor quality of the order.
Part 2 of the story: It appears that the officer, who passed order on 13/01/2026 under section 74 for financial year 2024-25 is a person of stable mind, who is aware of the correct application of relevant sections and still that order might have been passed under the presumption that the taxpayer, who is at a remote location, by name pavoor chatram may not approach the high court and a 10 % pre deposit on first appeal may help him to improve the monthly target. Now that GSTAT is in place and any taxpayer aggrieved by OIO is bound to go on first appeal and in case of rejection of appeal, shall file the second appeal as system is already in place. The High Courts handle writs purely based on legality and when they observe that there are violations of the provisions under GST law, relief is granted either by setting aside or quashing the incorrect order. The officers whose orders are set aside must understand that it is a black mark on them as they are not in a position to pass the right order and only because the high court has observed that order as incorrect, the same is set aside or quashed.
The officers who pass such incorrect orders may realize that when the order passed by him nullified by the high court, he puts three persons in to trouble. First of all, valuable time of high court is spent on procedural irregularities which is purely avoidable by GST officials. In the Second place they harm themselves as they have to re do the adjudication again. In the third place, the taxpayer gets mental agony due to the fault of the GST officer who pass incorrect orders or make inadvertent errors in the order.
Part 3 of the story: The honorable Madras high court has not fallen prey to the arguments of revenue but gone in depth to identify that the penalty was wrongly levied at 100 % of taxes under section 74 whereas the penalty is only 50% when the case is under section 74A. Accordingly, passed the order on 05/06/2026 as '6. If it is merely a case of quoting an incorrect provision of law inadvertently, the same would not invalidate the proceedings. However, on a perusal of the impugned order, it can be seen that a penalty at the rate of 100% has been imposed as if the order had been passed under Section 74 of the Act, whereas, if the respondents had exercised their power under Section 74A of the Act, only a 50% penalty would have been levied. Therefore, I am not in a position to conclude that this is merely an error in mentioning the provision of law.
7. In view thereof, this writ petition is allowed on the following terms.
i. The impugned order dated 13.01.2026 shall stand quashed. The respondent is entitled to initiate fresh proceedings in accordance with law under Section 74A of the Act.
ii. No costs. Consequently, connected miscellaneous petition is closed.'
Case reference: Madras High Court in W P (MD) 14984 of 2026 in the matter of Tvl. Punitha Antony Store Versus The State Tax Officer (Rovin G Squad – 2), Tirunelveli - 2026 (6) TMI 1488 - MADRAS HIGH COURT.
Take aways: The officers should stop passing incorrect orders as GSTAT is a highly specialised fora which deals exclusively GST cases and technical members are all senior departmental officers prior to becoming members. The role of member technical is to render the justice and not the one to improve the GST Collections. The Judicial members are also highly experienced legal professionals who are comfortable to fix the issues involved to quickly arrive at the conclusion. As GSTAT is expected to start hearing in the coming months, let us hope that the officers down the line update the judgements of the GSTAT to pass appropriate orders in the days to come.