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W.P(MD)No.8246 of 2026

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

Dated: 27.03.2026

CORAM

THE HONOURABLE MR JUSTICE D.BHARATHA CHAKRAVARTHY

W.P(MD)No.8246 of 2026 and

W.M.P(MD)Nos.6745 and 6746 of 2026

AR A S Appliances Private Limited Rep By Managing Director Mr Suresh K No.35/1

Samayanallur Road Vilangudi

Madurai 625 018. ... Petitioner

Vs.

The Assistant Commissioner (ST), West Veli Street Assessment Circle,

Ground Floor, C.T Complex,

Dr.Thangaraja Salai, K.K Nagar,

Madurai 625 020. ...Respondent

Prayer: Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of OF CERTIORARI calling for the records relating to the Impugned Order vide FORM GST DRC 07 bearing Reference Number ZD331225368950B dated 24.12.2025, passed by the Respondent herein, to quash the same and pass such other

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W.P(MD)No.8246 of 2026

further or other orders as this Honble Court may deem fit in the facts and circumstances of the case and thus render justice.

For Petitioner :Mr.G.Shiva Kumar For Respondent :Mr.R.Suresh Kumar

Additional Government Pleader

ORDER

The writ petition is filed challenging the impugned order dated

24.12.2025. The impugned order is an assessment passed under Section

73 of the TNGST Act, 2017.

2. Heard Mr.G.Shiva Kumar, learned counsel appearing for the

petitioner and Mr.R.Suresh Kumar, learned Additional Government

Pleader, who takes notice on behalf of the respondent.

3. Upon hearing the learned counsel for the petitioner and

perusing the material records of the case, the grievance of the petitioner is that the major discrepancy in the impugned order is the imposition of tax at the rate of 18% on the corporate guarantee provided by the

petitioner company to a related person.

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W.P(MD)No.8246 of 2026

4. The learned counsel for the petitioner would submit that as far

as the corporate guarantee is concerned, only 1% of the turnover is liable to be taxed at the rate of 18% and not the entire turnover, even with reference to that 1%, the petitioner also relies on certain circulars and earlier orders passed by this Court, which have been circulated by

the learned counsel.

5. The learned Additional Government Pleader for the respondent

would submit that the petitioner has the remedy of filing an appeal and without availing of this alternate remedy, the petitioner has approached

this Court.

6. I have considered the rival submissions made on either side and

perused the material records of the case.

7. Prima facie, it appears that the major portion of the tax liability

imposed by the impugned order is related to the corporate guarantee. The learned counsel for the petitioner submits that only 1% of the turnover is subject to taxation. This position could not be seriously

disputed by the learned Additional Government Pleader.

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W.P(MD)No.8246 of 2026

8. Further, the learned counsel for the petitioner points out that the

benefit of Circular No. 199/11/2023-GST dated 17.07.2023, Circular No. 204/16/2023-GST dated 27.10.2023, Circular No. 210/4/2024-GST dated 26.06.2024, and Circular No. 225/19/2024-GST dated 11.07.2024 operates in his favor. The learned counsel also refers to the judgment of this Court in the case of M/s. Amman Try Trading Company Private

Limited v. The State Tax Officer (2025 (10) TMI 1178 – Mad HC)

9. In light of the above, I am of the view that this is a fit case

where the impugned order should be set aside and the matter should be

remitted back to the respondent for fresh consideration.

10. Accordingly, the writ petition is allowed on the following

terms:-

i. The impugned order dated 24.12.2025 is set aside inasmuch as it

holds against the assessee, with the exception of the issue concerning the corporate guarantee. In respect of the other items,

the findings shall be deemed val