{"id":6872,"date":"2025-11-19T17:57:07","date_gmt":"2025-11-19T12:27:07","guid":{"rendered":"https:\/\/www.centaxonline.com\/blog\/?p=6872"},"modified":"2025-11-19T17:57:07","modified_gmt":"2025-11-19T12:27:07","slug":"hc-quashes-gst-demand-on-corporate-guarantee-for-ignoring-circulars-and-reasoning","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/hc-quashes-gst-demand-on-corporate-guarantee-for-ignoring-circulars-and-reasoning","title":{"rendered":"HC Quashes GST Demand on Corporate Guarantee for Ignoring Circulars and Reasoning"},"content":{"rendered":"<pre><strong>Case Details: <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/gst\/101010000000411134\/gst-order-on-corporate-guarantee-quashed-for-ignoring-circulars-fresh-order-to-be-passed-hc\">Amman Try Trading Company Pvt. Ltd. vs. State Tax Officer - V (RS) (2025) 36 Centax 146 (Mad.)<\/a><\/strong><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>G.R. Swaminathan<\/strong>, J.<\/li>\n<li><strong>S\/Shri M. Karthikeyan<\/strong> &amp; <strong>S. Jai Kumar<\/strong>, for the Petitioner.<\/li>\n<li><strong>Shri R.Suresh Kumar<\/strong>, Additional Government Pleader, for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The petitioner challenged a demand treating its corporate guarantee provided to a related party as a taxable supply. The petitioner submitted that the transaction was non-taxable, there was no consideration, the recipient had full ITC, and no invoice was issued. The adjudicating authority, however, levied tax at 1% of the guarantee amount without considering these defences or providing a reasoned order. The matter was accordingly placed before the High Court.<\/p>\n<h2><em>High Court Held<\/em><\/h2>\n<p>The High Court held that the adjudicating authority\u2019s failure to consider the petitioner\u2019s contention or provide a reasoned order rendered the impugned order unsustainable. It was observed that defenses premised on absence of consideration, full ITC to the recipient, and zero transaction value were not addressed. Consequently, the Court set aside the non-speaking order and remitted the matter for fresh adjudication on merits, directing the authority to consider all contentions in accordance with Section 75 of CGST Act, the Tamil Nadu GST Act.<\/p>\n<h2><em>List of Circulars Cited<\/em><\/h2>\n<ul>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Circular%20No.199%2F11%2F2023-GST&amp;itemType=AP\">Circular No.199\/11\/2023-GST<\/a>, dated: 17-7-2023<\/li>\n<li><a href=\"https:\/\/www.centaxonline.com\/search?searchData=Circular%20No.210%2F4%2F2024-GST&amp;itemType=AP\"> Circular No.210\/4\/2024-GST<\/a>, dated: 26-6-2024<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Amman Try Trading Company Pvt. Ltd. vs. State Tax Officer&hellip;<\/p>\n","protected":false},"author":8,"featured_media":6881,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,60,189],"tags":[],"class_list":["post-6872","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gst","category-news","category-gst-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>HC Quashes GST Demand on Corporate Guarantee for Ignoring Circulars and Reasoning<\/title>\n<meta name=\"description\" content=\"High Court sets aside GST order taxing corporate guarantee for being non-speaking and ignoring key defences; matter remitted for fresh adjudication.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.centaxonline.com\/blog\/hc-quashes-gst-demand-on-corporate-guarantee-for-ignoring-circulars-and-reasoning\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"HC Quashes GST Demand on Corporate Guarantee for Ignoring Circulars and Reasoning\" \/>\n<meta property=\"og:description\" content=\"High Court sets aside GST order taxing corporate guarantee for being non-speaking and ignoring key defences; 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