IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on 29.08.2025 Pronounced on 28.11.2025 CORAM THE HON'BLE Mr. JUSTICE KRISHNAN RAMASAMY W.P.Nos.15215 & 15222 of 2022 & W .M.P.Noss.14392, 14393 & 14399 of 2022 MRF Ltd Ichiputhur, Tiruttani Road, Arakkonam, Tamil Nadu-631 003, Rep. by its Authorised Representative Madhu P.Nainan ... Petitioner in WP.No.15215 of 2022 Madhu P.Nainan ...Petitioner in WP.No.15222 of 2022 Vs.

1. Additional Director DGGI Delhi Zonal Unit, Directorate General of GST Intelligence, West Block 8, Wing 3, 1st Floor, Sec-1, RK Puram, New Delhi-110 066.

2. Additional / Joint Commissioner of Central Tax, Chennai South Commissionerate, CGST Commissionerate Chennai South, 692, MHU Complex, Anna Salai, Nandanam, Chennai-35.

... Respondents in both petitions Prayer:

Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records of the impugned SCN bearing DIN No.

202204DNN00000111CA7 and dated 07.04.2022 issued by the 1st respondent, and to quash the same to call for the records of the impugned SCN No.F.No. DZU/ INV/

H/ 23/ 2019/ 9952 dated 07.04.2022 bearing DIN No. 202204DNN 00000111CA7 issued by the 1st respondent, and to quash the same to the extent it seeks to impose penalty on the petitioner under section 122(3) of the CGST Act / State GST Act.

For Petitioner : Mr.V.Lakshmikumaran, Asst. by Ms.R.Charulatha Mr.Raghav Rajeev Mr.Nirmal Ali for M/s.Preeti Mohan Mr.Sagarika Shankar For Respondent : Mr.AR.L.Sundaresan, ASG, Asst. by Mr.Rajinish Pathiyil, SPC for R1 Mr.K.Mohanamurali, SPC for R2

COMMON ORDER

These writ petitions have been filed against the impugned show cause notice dated 07.04.2022 issued by the 1st respondent.

2. Petitioner's submission:

2.1 The learned Senior counsel appearing for the petitioner would submit that in this case, the challenge was made with regard to the issuance of show cause notice under Section 74 of the Goods and Services Tax Act, 2017 (hereinafter called as “the Act”).

2.2 The petitioner is a limited company, incorporated under the Companies Act, 1956, and it is a listed company in India as well as abroad. The impugned show cause notice was issued by the 1st respondent against the petitioner with regard to the wrongful availment of ITC and for calling upon the petitioner to payback a sum of Rs.78 Crores. The issuance of said notice, had caused adverse impact on the stock values of the petitioner-Company.

2.3 He would submit that in this case, the petitioner made a supply of tyres, tubes and flaps (TTF) in a carry strapping form. As on the date of introduction of GST, i.e., with effect from 01.07.2017, all the three items are chargeable to GST at the rate of 28%. Therefore, whenever they effected the supply, they had raised separate invoices for each items and send it to the manufacturers.

2.4 He would also submit that for the purpose of convenience, the tyres, tubes and flaps are sent together by rising separate invoices.

Therefore, at no point of time, the aforesaid items were supplied under a single invoice treating it as a “composite supply”. Under these circumstances, with effect from 15.11.2017, the rate of duty against the tube was reduced from 28% to 18%. Likewise, from 01.01.2019, the duty liability of the flaps was reduced from 28% to 18%. Accordingly, the invoices were raised and supplies have been effected by the petitioner. However, there was a confusion among the industries as to whether effecting the supply of TTF in a carry strapping form is a “composite supply” or “individual supply”. Therefore, on 07.01.2019, the petitioners had sent a communication that they are going to treat the supply of TTF in carry strapping as a “composite supply” and pay the short payment of additional 10%, along with the interest, for the tubes for the period between 15.11.2017 and 05.01.2019 and for the flaps for the period between 01.01.2019 and 05.01.2019. Accordingly, the entire tax amount, along with the inter