Telangana HC Rules on Parallel GST Proceedings: Writ Jurisdiction Cannot Bypass Statutory Appeal Mechanism
The Hon’ble Telangana High Court recently delivered a significant judgment in the case of Sensation Infracon Pvt. Ltd. Vs State of Telangana, addressing the interplay between investigations by central agencies and adjudication by state authorities. The Court dismissed a writ petition filed by an assessee who sought to challenge an assessment order directly, bypassing the standard appellate channels, on the grounds that a prior investigation by the Directorate General of GST Intelligence (DGGI) had already concluded the matter.
Case Background and Facts
The dispute arose when the assessee, a registered private limited company, approached the High Court challenging an Order-in-Original dated 28 February 2025. This order was passed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act), pertaining to the financial year 2020–21.
Prior to this order, the State Tax authority had issued a Show Cause Notice (SCN) in Form GST DRC-01 on 27 November 2024, alleging that the assessee had irregularly availed Input Tax Credit (ITC). Consequently, a tax liability of Rs. 96,30,225.26 was determined against the company.
The Assessee’s Contention
The primary argument put forth by the assessee was that the issue of ITC availment on invoices without the underlying receipt of goods or services had already been scrutinized by the DGGI. The assessee highlighted that:
- An investigation was conducted under Sections 74(5) and 74(6) of the CGST Act.
- During this process, the assessee had deposited GST amounting to Rs. 1,50,85,580, along with applicable interest of Rs. 41,33,682 and a penalty of Rs. 22,62,838.
- The assessee had requested the closure of proceedings based on these payments.