Facts of the Case

The petitioner, M/s. Y. Venkat Reddy, a sole proprietorship represented by its proprietor, challenged an assessment order dated 12.07.2022 (AO No. ZH3707220D74477) passed by the Deputy Commissioner (ST), ETU Kadapa Division, under the CGST, SGST and IGST Acts, 2017, insofar as it imposed interest for the tax periods 2017-18 to 2020-21. The petitioner sought a writ declaring the order without jurisdiction and contrary to law, contending it was passed by an officer not being the "proper officer" and without any pre-show cause intimation in Form GST DRC-01A. An interlocutory application sought stay of collection of the disputed interest of Rs. 7,23,856/- (IGST), Rs. 11,28,552/- (CGST) and Rs. 11,28,552/- (SGST) for the period. Respondent Nos.5 and 6 were later impleaded by court order dated 13.09.2023. The matter was heard by a Division Bench of the Andhra Pradesh High Court.

Issues Involved

  1. Whether the impugned interest demand was without jurisdiction for want of a pre-show cause intimation in Form GST DRC-01A and for having been passed by an officer other than the proper officer.
  2. Whether the writ petition was maintainable given the availability of an efficacious statutory appellate remedy.

Petitioner's Arguments

  • The assessment order was passed by an authority not vested with jurisdiction as the "proper officer" for the purpose.
  • No pre-show cause notice intimation in Form GST DRC-01A was issued before raising the interest demand, making the order without jurisdiction, without authority and contrary to law.
  • Immediate stay of collection was necessary as recovery of the disputed interest would cause severe loss and hardship to the petitioner.

Respondent's Arguments

  • The Government Pleader for Commercial Tax opposed the writ petition, contending that the petitioner had an efficacious and alternative remedy of filing a statutory appeal against the impugned order.
  • It was submitted that the writ petition was not maintainable on this ground and ought to be dismissed in limine.

Court Order/Findings

  • Learned counsel for the petitioner, while admitting to filing an appeal before the concerned appellate authority, sought time to do so, effectively not pressing the jurisdictional contentions for adjudication by the writ court.
  • The Court did not record any independent finding on the proper-officer or DRC-01A objections, and instead disposed of the writ petition granting the petitioner liberty to file an appeal before the Appellate Authority within two weeks, directing that the appeal be admitted and disposed of in accordance with law.
  • No costs were awarded and pending interlocutory applications stood closed.

Important Clarification

Where a taxpayer's counsel, in the course of hearing, indicates willingness to pursue the statutory appellate remedy, the High Court will often decline to rule on jurisdictional objections to a GST demand and will instead dispose of the writ with a short window of liberty to file an appeal, directing the appellate authority to admit and decide it on merits notwithstanding any delay. This is a common route for closing writ proceedings without foreclosing an assessee's substantive contentions, which remain available before the appellate forum.

Sections Involved

  • CGST, SGST and IGST Acts, 2017 — charging provisions and interest under Section 50 for the tax periods 2017-18 to 2020-21.
  • Form GST DRC-01A — pre-show cause intimation procedure under the CGST Rules, 2017.
  • Section 107, CGST Act, 2017 — statutory appeal against an order passed by an adjudicating authority.

Decision – In Favour of

The disposal is procedural rather than a decision on merits. The writ petition was not allowed on the jurisdictional grounds urged by the petitioner; instead, the petitioner was relegated to the statutory appellate remedy with a short extension of time to file the appeal. This outcome is, on balance, in favour of the Department on the question of writ maintainability, though the Assessee retains its jurisdictional and DRC-01A objections for the appellate authority to consider afresh.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: WRIT PETITION NO: 37181 OF 2022
  • CNR: Not available
  • Coram: Justice U. Durga Prasad Rao and Justice A.V. Ravindra Babu
  • Decision Date: 05.10.2023
  • Disposal Nature: Disposed of; liberty to file appeal

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