Telangana High Court Allows Belated Appeal Against Section 73 GST Order Based on Non-Service Claim

Overview

The Telangana High Court in M/s. Gayathri Seeds & Pesticides vs Assistant Commissioner of Central Tax & Others examined whether an assessee, who asserts that it first became aware of a GST demand only after receipt of a garnishee notice, can still be permitted to avail the statutory appellate remedy despite apparent delay.

The Court ultimately declined to enter into the merits of the demand raised under Section 73 of the CGST Act, 2017 for the FY 2020-21, but granted liberty to the assessee to file an appeal. Importantly, the Court directed that the appeal be considered in accordance with law, keeping in view that the assessee had been pursuing a writ petition in the interim, and also granted limited protection from coercive recovery.

Factual Background

Impugned GST Proceedings

The writ petition before the Telangana High Court arose out of the following actions taken by the GST authorities:

  • An Order-in-Original dated 30.01.2025
  • A summary order in Form GST DRC-07 dated 04.02.2025
  • Proceedings initiated under Section 73 of the Central Goods and Services Tax Act, 2017
  • Pertaining to the tax period 2020-2021

Under these proceedings, tax, interest and penalty were imposed upon the assessee, M/s. Gayathri Seeds & Pesticides.

Claim of Lack of Knowledge of Demand

According to the assessee, it had no prior knowledge of the demand created through the Order-in-Original and Form GST DRC-07. The assessee maintained that:

  • It first became aware of any liability only upon receipt of a garnishee notice
  • The garnishee notice was issued in Form GST DRC-13 on 17.10.2025
  • The notice was issued for attachment of the assessee’s bank account
  • Upon receipt of this notice and facing imminent recovery, the assessee approached the High Court seeking relief against the demand and coercive proceedings

Thus, the primary grievance was that, in the absence of effective communication of the original adjudication order, the assessee was deprived of its opportunity to file an appeal within the prescribed statutory period.

The central issue considered by the High Court can be framed as follows:

Whether an assessee, who asserts that it became aware of a GST demand only upon initiation of recovery through a garnishee notice, should be allowed to pursue the statutory appellate remedy under Section 107 of the CGST Act, even though the normal appeal period may have expired?

This question also tangentially involved the scope of the High Court’s writ jurisdiction in GST matters where a statutory remedy exists, and the extent to which delay can be viewed sympathetically when the assessee was simultaneously pursuing a writ remedy.

Contentions Raised

Assessee’s Arguments

The assessee, through counsel, contended broadly as under:

  • No prior knowledge of demand: The assessee was not aware of the Order-in-Original dated 30.01.2025 or the summary order in Form GST DRC-07 dated 04.02.2025.
  • First intimation via garnishee notice: It was only upon issuance of Form GST DRC-13 on 17.10.2025, proposing attachment of the bank account, that the assessee realized that a demand had been raised.
  • Coercive recovery already initiated: Since the bank account was brought within the ambit of recovery, immediate interference by the Court was sought to prevent hardship.
  • Request for liberty to appeal: During the course of hearing, the assessee’s counsel specifically sought liberty to file a statutory appeal against the Order-in-Original.
  • Sympathetic view of delay: It was urged that any delay in preferring the appeal should be considered sympathetically by the appellate authority, particularly because the assessee had been diligently pursuing its rights before the High Court through the writ petition instead of approaching the appellate forum directly.

Revenue’s Position

On behalf of the Revenue, the Senior Standing Counsel submitted the following: