The Madras High Court quashed assessment, rectification and appellate orders against a mercerising company and remanded the matter with directions to verify its amended returns.
The Madras High Court has held that an assessment that ignores a taxpayer’s rectification of an erroneous reverse charge entry through an amended GSTR‑1 suffers from patent non-application of mind. Justice Krishnan Ramasamy set aside the orders and remanded the matter in two writ petitions [The Coimbatore Pioneer Mercerising Company v. Deputy Commissioner (ST) Appeals, Coimbatore & Ors., 2026-juristway.com-3233-HC(Madras)-GST].
While filing GSTR‑1 for 2020-21, the petitioner had wrongly reported its tax liability under the reverse charge mechanism. It said it corrected the error by filing an amended GSTR‑1 in September 2021, as the law permits, and furnished the details for 2020-21 and 2021-22 to the authorities.
The petitioner challenged an assessment order of 19 Dec 2025, a rectification order of 4 Mar 2026 and an appellate order of 16 Jul 2026, arguing that its pleas had been rejected mechanically. The Special Government Pleader fairly suggested that the matter be remanded for fresh consideration on all relevant documents.
Noting that the rectification is permitted under law, the Court observed that “this Court fails to understand why the Assessing Officer completely overlooked this aspect.” It held that the impugned orders suffered from patent non-application of mind and set aside all three.
The assessing authority must issue a fresh notice, verify the GSTR‑1 amendments and GSTR‑9 returns filed by the petitioner, give a sufficient opportunity of hearing and pass a reasoned speaking order. The exercise is to be completed within eight weeks of receipt of a copy of the order. No costs were awarded.
2026-juristway.com-3233-HC(Madras)-GST
