Facts of the Case

The petitioner, M/s. Kanaka Durga Enterprises, Hyderabad, was subjected to demand proceedings issued by the Assistant Commissioner (State Taxes), Medhipatnam Circle, Charminar Division, comprising an order dated 25.08.2024 (Order Ref. No. ZD3608211144657Y) and a consequential attachment order dated 30.08.2024, raising a demand of Rs. 79,21,586, including penalty at 18%, for the assessment year 2019-20. The petitioner contended that the demand was not a legal one, that the underlying assessment had not been properly or timely made and was barred by limitation under the GST Act, 2017, and that its representation dated 17.08.2024 claiming Input Tax Credit had not been considered. It approached the High Court under Article 226 of the Constitution seeking to set aside the orders and suspend the demand.

Issues Involved

  1. Whether the impugned demand and attachment orders, alleged to be time-barred and passed without considering the petitioner's Input Tax Credit representation, were sustainable.
  2. Whether the petitioner, having an appellate remedy available, could be permitted to pursue that remedy without being defeated on the ground of limitation.

Petitioner's Arguments

  • The demand of Rs. 79,21,586, including penalty, was not a legal demand, and the underlying assessment for AY 2019-20 was neither properly nor timely made, being barred by limitation under the GST Act, 2017.
  • The petitioner's representation dated 17.08.2024 seeking Input Tax Credit had not been considered before the impugned demand and attachment orders were passed.
  • The petitioner was ready to pursue the statutory appellate remedy against the attachment order but sought that limitation not operate as a hurdle to filing it.

Respondent's Arguments

  • The Special Government Pleader for State Tax fairly conceded that the impugned order was appealable and did not oppose the petitioner's request for liberty to file a delayed appeal.

Court Order / Findings

  • Both counsel fairly submitted that the impugned attachment order dated 29.08.2024 was appealable.
  • The Court disposed of the writ petition by reserving liberty to the petitioner to file an appeal within fifteen days, directing that the appellate authority decide it on merits and not dismiss it on the ground of delay.
  • The Court made it clear that it had not expressed any opinion on the merits of the case; no costs were imposed, and pending interlocutory applications were closed.

Important Clarification

  • Where a GST demand or attachment order is admittedly appealable, a High Court will often decline to examine limitation or merits itself and instead grant a short, defined window to file a delayed statutory appeal, directing the appellate authority not to reject it on the ground of delay.
  • Such relief is purely procedural — it is not a finding that the underlying demand is unsustainable or time-barred; those questions remain open for the appellate authority to decide on merits.

Sections Involved

  • Telangana Goods and Services Tax Act, 2017 — governs the underlying demand and attachment proceedings challenged in the petition.
  • Section 107 of the CGST/TGST Act, 2017 — the statutory appellate remedy under which the petitioner was granted liberty to appeal within fifteen days notwithstanding limitation.
  • Article 226 of the Constitution of India, 1950 — invoked for the writ remedy before the High Court.

Decision – In Favour of

Disposed of with directions and no finding on merits. The Court neither upheld nor set aside the demand or attachment order, and instead granted the Assessee a fifteen-day window to file a statutory appeal, directing that it not be dismissed on the ground of delay.

Related Case Laws

No directly on-point case notes on procedural relief granted without deciding the merits of a GST demand are currently published on this site.

Case Details

  • Court: High Court for the State of Telangana at Hyderabad
  • Case No.: W.P. No. 36520 of 2024
  • CNR: HBHC010711382024
  • Coram: Justice Sujoy Paul and Dr. Justice G. Radha Rani
  • Decision Date: 30-12-2024

Link to Download the Order

Download the full judgment (PDF)