Madras High Court Defers GST Inquiry on ₹1,100 Crore Tax Demand Against TANTRANSCO
(Judicial Quest News Network)
Chennai,21, February, 2025.Justice Krishnan Ramasamy of the Madras High Court has deferred the inquiry proceedings by the Goods and Services Tax (GST) department involving four show-cause notices issued to TANTRANSCO for the financial years 2017-2018 to 2020-2021. This decision, made on February 21, 2025, follows arguments presented by Senior Advocate P. Wilson, representing TANTRANSCO, concerning a ₹1,100 crore tax demand linked to these notices.
TANTRANSCO, responsible for transmitting electricity across Tamil Nadu, received these show-cause notices from the GST department after an audit, demanding GST payment on capital goods used by the utility. P. Wilson contended that TANTRANSCO’s activities, which were previously exempt from service tax, should not be subject to GST post its implementation in 2017. He argued that the claims violated Section 65 of the Central Goods and Services Tax (CGST) Act, 2017, and Rule 101 of the CGST Rules, 2017.
Wilson further argued that electricity, as a unique and intangible commodity, falls under Entry 53 list II of the 7th Schedule of the Constitution, granting states exclusive authority over its sale and consumption. Hence, the transmission and distribution of electricity should not fall under GST’s indirect taxes.
Justice Krishnan Ramasamy directed the deferment of the inquiry proceedings, accepting Wilson’s request. TANTRANSCO had filed four separate writ petitions challenging the GST Act’s applicability to its operations. The matter will be heard again on April 7, 2024.
