Quick Summary: On December 5, 2025, the Madras High Court delivered a decision on a tax dispute involving Lakshmi Enterprises from Coimbatore. The case revolved around a claim of excess Input Tax Credit (ITC) amounting to ₹12,52,823 for the financial year 2019-20. The court, led by Justice Senthilkumar Ramamoorthy, partially set aside the tax order, allowing for a fresh review.
Lakshmi Enterprises, represented by its owner Mr. B. Sripathi, filed a request under Article 226 of the Indian Constitution. The company wanted to cancel an order dated August 30, 2024, about an alleged excess ITC claim. This order was issued by the Deputy State Tax Officer-1 in Coimbatore.
Lakshmi Enterprises argued that they were not given a fair chance to argue against the tax demands. Their lawyer, Mr. R. Anish Kumar, emphasized that the business is small and doesn't have a dedicated accountant, which made it hard to handle such tax disputes effectively.
"The petitioner was not provided a reasonable opportunity to contest the tax demands."
Justice Senthilkumar Ramamoorthy noted that the request was filed after the allowed time period had expired. However, considering the circumstances, the court decided to provide partial relief. Lakshmi Enterprises was required to pay 50% of the main tax demand within four weeks.
The court partially canceled the contested order related to the excess ITC claim. It instructed a new review, ensuring that Lakshmi Enterprises would be given a reasonable opportunity to present their case. A new detailed order is to be issued within three months.
"A fresh speaking order shall be issued within three months from the date of receipt of a copy of this order."
The court decided to give Lakshmi Enterprises another chance to present their case by ordering a new review of the tax claim. They need to pay half of the tax amount while waiting for the tax authorities to re-evaluate their claim and issue a new decision within three months.
