Facts of the Case

The petitioner, M/s. Sri Lalitha Construction Products, represented by its Partner Mr. Thota Venugopal, challenged a Re-Auction Public Notice dated 06.12.2023 issued by the first respondent proposing to auction the petitioner firm's property to recover a balance disputed tax of Rs. 80,92,852/- and balance disputed penalty of Rs. 1,01,18,186/- for the tax period 2014-15 to 2016-17 (VAT), as well as an attachment of the petitioner's property dated 26.09.2023 in Form GST DRC-16. The petitioner also sought restoration of a tax appeal filed on 07.08.2019 against an order dated 23.09.2019, noting that the pre-deposit of Rs. 14,52,090/- had since been paid on 28.09.2020, and sought a restraint on coercive recovery pending disposal of that appeal before the Andhra Pradesh High Court.

Issues Involved

  1. Whether the re-auction notice and the GST DRC-16 attachment of the petitioner's property were illegal, arbitrary and liable to be set aside.
  2. Whether the petitioner's tax appeal filed in 2019 ought to be restored and adjudicated on merits given payment of the pre-deposit.
  3. Whether coercive recovery proceedings should be restrained pending disposal of the writ petition and the underlying appeal.

Petitioner's Arguments

  • The petitioner initially sought to challenge the re-auction notice and the DRC-16 attachment as illegal, arbitrary and unjustified, and to have the attached property released.
  • The petitioner also sought restoration of its pending tax appeal, contending that the pre-deposit condition had already been satisfied by payment made in 2020.
  • During the hearing, learned senior counsel for the petitioner acknowledged that the petitioner had itself approached the authority by a letter dated 15.11.2023 requesting an installment facility and expressing willingness to pay the tax and penalty in installments.
  • Faced with the Court's indication that it was not inclined to entertain the writ petition once the petitioner had accepted an installment arrangement but failed to comply with it, learned senior counsel elected to withdraw the writ petition.

Respondent's Arguments

  • The respondents, represented by the Government Pleader for Commercial Tax, relied on the fact that the petitioner had itself sought and been granted an installment facility by the Joint Commissioner (ST), Vizianagaram, in response to its own letter dated 15.11.2023.
  • It was pointed out that despite this concession, the petitioner had not complied with the installment schedule, not even depositing the first installment, undermining the case for interference with the recovery action.

Court Order/Findings

  • The Court observed that the petitioner had itself requested and secured an installment arrangement from the Joint Commissioner, but had failed to make even the first payment under that arrangement.
  • On this basis, the Court expressed its view that it was not inclined to entertain the writ petition, following which the petitioner sought to withdraw it, and the Court dismissed the writ petition as withdrawn, without costs.
  • The Court also placed on record a discrepancy regarding a separately mentioned petition referenced in the petitioner's own installment-request letter, which counsel clarified had only been filed at the SR (scrutiny) stage and was withdrawn before numbering, and which had not been disclosed in the writ affidavit.
  • All connected miscellaneous petitions were closed as a sequel to the dismissal.

Important Clarification

  • A taxpayer who voluntarily seeks and obtains an installment facility for payment of disputed tax and penalty, but then defaults even on the first installment, is unlikely to find a court sympathetic to a subsequent writ challenge to recovery/attachment action for the same dues.
  • Full and candid disclosure of connected or previously filed proceedings is expected in the writ affidavit; failure to disclose a related petition, even one withdrawn at the SR stage, can attract judicial scrutiny.
  • Withdrawal of a writ petition challenging recovery action does not itself resolve the underlying tax and penalty dispute — the petitioner's substantive appeal remedy (and any pre-deposit already made) remains a separate track to be pursued.

Sections Involved

  • Form GST DRC-16, CGST/APGST Rules, 2017 — the prescribed form for attachment and sale of property for recovery of confirmed tax dues.
  • Recovery provisions, Andhra Pradesh GST Act / APVAT Act — govern coercive recovery, including auction of attached property, for confirmed tax and penalty arrears.

Decision – In Favour of

Decided in favour of the Department, in effect — the writ petition challenging the re-auction notice and property attachment was dismissed as withdrawn after the Court declined to entertain it, given the petitioner's own default on an installment arrangement it had sought.

Related Case Laws

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

Case Details

  • Court: High Court of Andhra Pradesh, Amaravati
  • Case No.: Writ Petition No. 32017 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble Sri Justice Ravi Nath Tilhari and Hon'ble Sri Justice A.V. Ravindra Babu
  • Decision Date: 13 December 2023
  • Disposal Nature: Dismissed as withdrawn

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