GST Exemption Allowed Despite Brand Image After Disclaimer

Case Details: Narasus Saarathy Enterprises (P.) Ltd. vs. Additional Commissioner of GST & Central Excise [2026] 185 taxmann.com 321 (Madras)

Judiciary and Counsel Details

C. Saravanan, J.
Ms Aparna Nandakumar for the Petitioner.
Sai Srujan Tayi, Sr. Standing Counsel for the Respondent.

Facts of the Case

The petitioner was engaged in the supply of maida, sooji, etc., was registered under GST. It supplied certain goods in unit containers without registered brand names, claiming exemption under Serial Nos. 73 and 74 of Notification No. 2/2017-Central Tax (Rate), dated 28-06-2017, while branded goods were taxed at applicable rates. It was contended that though packaging carried a generic farmer image and corporate name, an affidavit was filed disclaiming any actionable claim or enforceable right over the brand, which the Department acknowledged. It was further submitted that regular returns were filed and there was no suppression of facts, as the exemption claim was duly disclosed. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the invocation of the extended period under Section 74 of the CGST Act, read with the Tamil Nadu GST Act, was not sustainable as the essential ingredients of fraud, wilful misstatement, or suppression of facts were not established. It was observed that the petitioner had already filed an affidavit disclaiming any actionable claim or enforceable right over the alleged brand name, thereby placing the jurisdictional officer under CGST on notice regarding the exemption claimed under Serial Nos. 73 and 74 of Notification No. 2/2017-Central Tax (Rate), dated 28-06-2017. The Court further noted that regular returns were filed and there was no concealment of material facts from the Department. Accordingly, it was held that only the normal limitation period under Section 73 was applicable, rendering the demand under Section 74 unsustainable.

List of Cases Reviewed

Nizam Sugar Factory v. CCE, AP., 2006 (197) ELT 465 (SC) (para 87), followed

List of Cases Referred to

Titan Company Ltd. v. Joint Commissioner of GST & Central Excise [2024] 159 taxmann.com 162 (Madras) (para 33)
Joint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories [2025] 171 taxmann.com 214/108 GST 750/95 GSTL 356 (Kerala) (para 34)
Veremax Technologie Services Ltd. v. Asstt. Commissioner of Central Tax [2024] 167 taxmann.com 332 (Karnataka) (para 38)
Bangalore Golf Club v. Commercial Tax Officer (Enforcement) [2024] 164 taxmann.com 51/105 GST 275 (Karnataka) (para 38)
Dilip Kumar Swain v. Dy Director, DGGI [W. P. (C) No. 27979 of 2024, dated 26-11-2024] (para 38)
X L Interiors v. Deputy Commissioner (Intelligence), SGST Department [2024] 169 taxmann.com 707 (Kerala) (para 38)
Pushpam Pharmaceuticals Co. v. Collector of Control Excise 1995 Supp. (3) SCC 462 (para 39)
Continental Foundation Joint Venture v. CCE 2007 taxmann.com 532/2007 (216) E.L.T. 177 (SC) (para 39)
Nizam Sugar Factory v. CCE 2006 taxmann.com 2313/2006 (197) E.L.T. 465 (SC) (para 39)
Jaiprakash Industries Ltd. v. CCE 2002 taxmann.com 171/2002 (146) E.L.T. 481 (SC) (para 39)
Padmini Products v. CCE 1989 taxmann.com 629/1989 (43) E.L.T. 195 (SC) (para 39)
K.T. Murukan v. Commissioner (Appeals-I) 2017 (5) G.S.T.L. 248 (Ker.) (para 39)
Additional/Joint Commissioner of GST and Central Excise v. Eskay Trans [W. A. No. 3448 of 2025, dated 12-11-2025] (para 41)
Mathur Polymers v. Union of India [2025] 177 taxmann.com 860/103 GSTL 72 (Delhi) (para 42)
ITC Ltd. v. Nestle India Ltd. 2020 SCC Online Mad 1158 (para 60)
Astra Pharmaceuticals (P.) Ltd. v. CCE 1995 taxmann.com 825/1995 (75) E.L.T. 214 (SC) (para 61).