Disparity between seigniorage fee paid and supply value declared in GSTR-1 justifies invocation of extended period of limitation under Section 74 of the CGST Act

Last updated: 03 August 2026

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The Madras High Court has ruled that a significant difference between the seigniorage fee paid by a quarrying business and the value of outward supplies declared in its GSTR-1 returns can justify invoking the extended period of limitation for tax recovery under Section 74 of the CGST Act. The court found that such a disparity creates a prima facie case for alleged suppression of turnover. While dismissing the company's writ petitions, the court granted them liberty to file a statutory appeal within 30 days.

Court :
Madras High Court

Brief :
The Hon'ble Madras High Court in KPR Enterprises v. State Tax Officer [W.P. Nos. 35453, 35458 and 35463 of 2024 dated June 12, 2026] dismissed the writ petitions challenging the assessment orders passed under Section 74 of the Central Goods and Services Tax Act, 2017 ("the CGST Act")/ the Tamil Nadu Goods and Services Tax Act, 2017 ("the TNGST Act") and held that where the assessee has paid a huge amount towards seigniorage fee but has under-declared the value of outward supply in Form GSTR-1, a prima facie case is made out for invocation of the extended period of limitation under Section 74 of the CGST Act, since the expression used in both Section 73 and Section 74 of the CGST Act is "where it appears". However, liberty was granted to the assessee to file a statutory appeal within a period of 30 days.

Citation :
W.P. Nos. 35453, 35458 and 35463 of 2024 dated June 12, 2026

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