Extended GST Demand Upheld for Failure to Maintain Job-Work Records | HC
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Case Details: Tvl. Technocast Foundry vs. State Tax Officer [2026] 187 taxmann.com 764 (Madras)
Judiciary and Counsel Details
- C. Saravanan, J.
- Mrs R. Hemalatha for the Petitioner.
- C. Harsharaj, Special Govt. Pleader for the Respondent.
Facts of the Case
The petitioner, a registered manufacturer, challenged orders passed under Section 74 of the CGST Act, whereby tax, interest and equal penalty were confirmed on goods sent to its sister concern for job work. Pursuant to an inspection, the Department alleged non-compliance with the job-work procedure, including failure to maintain job-work records, furnish Form GST ITC-04 and establish return of goods within the prescribed period. The petitioner contended that the non-compliance arose due to technical glitches and that the transactions constituted job-work transfers. It was further submitted that tax liability, if any, may already have been discharged by the principal or the job worker, warranting examination of revenue neutrality. The matter was accordingly placed before the High Court.
High Court held
The High Court held that, in the absence of records evidencing receipt of goods within the period prescribed under Section 143 of the CGST Act read with Rule 45 of the CGST Rules, the deeming fiction treating such movement as supply was attracted, resulting in tax liability. The Court further held that the exceptions under the proviso to Section 143 were inapplicable and that the petitioner was under a statutory obligation to maintain proper records and to comply with the prescribed job-work procedure. Applying Section 74, the Court upheld the invocation of the extended period of limitation, observing that the GST framework permits such action where short payment or discrepancies emerge from the taxpayer’s records and the case did not fall within the recognised exceptions. However, considering the petitioner’s plea of revenue neutrality, the Court remanded the matter to the adjudicating authority.
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