Madras High Court Directs Expeditious Disposal of Rectification Application in GST Input Tax Credit Dispute

Madras High Court Addresses Delay in Rectification Application on GST Input Tax Credit Issue

The Madras High Court, presided over by Justice C. Saravanan, considered a writ petition challenging an order confirming a GST demand against the petitioner for the tax period 2021-2022. The impugned order, dated 07.11.2025, was passed in Form GST DRC-07, confirming the proposals made in the earlier show cause notice, despite the petitioner’s detailed replies.

The petitioner, represented by Mr. Subramanian C, argued that the demand was confirmed even though a categorical reply on merits had been filed on 30.08.2025. The core issue revolved around the disallowance of input tax credit (ITC) availed by the petitioner due to the cancellation of the GST registration of its supplier. The petitioner contended that, during the relevant period, the supplier had duly filed returns in both GSTR-1 and GSTR-3B, thereby validating the ITC claim. It was further submitted that these facts were not adequately considered by the respondent authority.

The Court noted that the petitioner had also filed an application on 21.01.2026 under Section 161 of the GST enactments, seeking rectification of the impugned order. However, this application had not received any response from the respondent. During the hearing, the learned Government Advocate for the respondent assured the Court that the petitioner’s application would be considered and disposed of on merits.

Taking note of these submissions, the Court directed the respondent to dispose of the petitioner’s rectification application concerning the order dated 07.11.2025 within 30 days from the date of the order. The writ petition was accordingly disposed of with this direction, and all connected miscellaneous petitions were closed. No order as to costs was made.

This decision underscores the Court’s emphasis on procedural fairness and the timely consideration of rectification applications under the GST regime, particularly where substantive replies and statutory remedies have been invoked by the taxpayer.