Section 74 Demand Set Aside Where Turnover Appears Prima Facie Below GST Registration Threshold and Opportunity of Hearing Denied

Last updated: 30 June 2026

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Quick Summary

The Madras High Court has overturned a tax and penalty demand issued under Section 74 of the CGST Act. The court found that the demand was made without providing the assessee, Abirami Agro Agencies, an opportunity to be heard, violating principles of natural justice. Furthermore, the authorities' assessment of the company's turnover appeared to be below the threshold required for GST registration, making the demand itself questionable.

Court :
Madras High Court

Brief :
The Hon’ble Madras High Court in M/s. Abirami Agro Agencies v. The State Tax Officer & Ors. [W.P. No. 18444 of 2026 and W.M.P. Nos. 19783, 19785 & 19786 of 2026 dated June 04, 2026] set aside the order raising tax and penalty under Section 74 of the Central Goods and Services Tax Act, 2017 ( “the CGST Act” ) and remanded the matter for fresh consideration, holding that the impugned order was passed without granting an opportunity of hearing to the Assessee and that the turnover recorded by the GST authorities appeared prima facie to be below the threshold prescribed for registration under the GST law.

Citation :
W.P. No. 18444 of 2026 and W.M.P. Nos. 19783, 19785 & 19786 of 2026 dated June 04, 2026

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