The Tamil Nadu State GST Department has issued Circular No. 04/2026 dated April 22, 2026 introducing significant changes to the adjudication mechanism applicable to Large Taxpayers Unit (LTU) taxpayers who are subjected to inspection by the Intelligence Wing.
The change comes in the backdrop of an increase in the number of taxpayers under the LTU, Chennai. The number of LTU taxpayers has reportedly increased from 74 to 124 following restructuring measures that excluded certain taxpayers and included several taxpayers from various divisions into the LTU structure.
The circular has been issued by the Office of the Commissioner of Commercial Taxes under the Tamil Nadu GST framework and modifies earlier instructions contained in Circular Nos. 13/2022, 11/2023 and 13/2023.
Under the earlier mechanism, although adjudication for LTU taxpayers under Sections 73, 74 and 74A of the GST Act ordinarily vested with the Deputy Commissioner (LTU), a different process operated in cases where inspections were carried out by the Intelligence Wing. In such instances, adjudication authority rested with Assistant Commissioners or State Tax Officers depending upon the revenue effect involved in the case. This often resulted in a separation between inspection and subsequent adjudication processes.
The new circular now changes this arrangement by directing that adjudication in respect of LTU taxpayers inspected by the Intelligence Wing shall also be carried out by the concerned Deputy Commissioner (LTU). Accordingly, after issuance of Form GST DRC-01A, the Intelligence Wing will transfer the adjudication task along with all relevant records to the concerned Deputy Commissioner of LTU.
The circular further addresses pending cases. It provides that where GST DRC-01 notices or personal hearing notices had already been issued by the Intelligence Wing and proceedings remained pending as on the date of the circular, such adjudication work must also be transferred to the Deputy Commissioner (LTU). Taxpayers are required to be informed through an e-mail communication indicating that further adjudication proceedings will now be undertaken by the Deputy Commissioner (LTU).
To ensure smooth implementation, the Joint Commissioner (Intelligence) has been instructed to oversee the immediate transfer of records, while the Additional Commissioner (Systems) has been directed to facilitate system-level migration of tasks at the DRC-01A and personal hearing stages from the Intelligence Division to the LTU authority.
The Commercial Taxes Department stated that the modification has been introduced as part of the “Ease of Doing Business” initiative. The change aims to centralise post-inspection proceedings before a single adjudicating authority, thereby reducing administrative overlap and ensuring consistency in handling LTU taxpayer matters. The revised framework has been made applicable with immediate effect.
Read More: CJI Surya Kant Clarifies ‘Cockroach’ Remark, Says Comments Were Against Fake Degree Holders
