Telangana High Court Allows Statutory GST Appeal and Halts Garnishee Recovery for Two Weeks

Background of the Dispute

The matter concerns KR Power Infra (India) Private Limited Vs Additional Commissioner (Central Tax) & Others (Telangana High Court), where M/s. KR Power Infra (India) Private Limited approached the Telangana High Court challenging an adjudication order passed under Section 74 of the Central Goods and Services Tax Act, 2017 and the Telangana Goods and Services Tax Act, 2017.

The impugned Order-in-Original dated 15.1.2025, along with the Summary of Order in Form GST DRC-07 dated 6.2.2025, had resulted in demand of tax and penalty aggregating to ₹5,93,97,436 for the financial years 2017-18 to 2022-23. Recovery proceedings were also triggered through a garnishee notice.

The assessee invoked the writ jurisdiction of the High Court, raising several legal and constitutional challenges, but during the course of hearing opted to pursue the statutory appellate route instead, while seeking protection from coercive recovery and sympathetic consideration of delay in filing the appeal.

Parties and Representation

  • Petitioner: M/s. KR Power Infra (India) Private Limited
  • Respondents: Additional Commissioner (Central Tax) & Others

Appearances:

  • For the petitioner: Mr. K.P. Amarnath Reddy, learned counsel
  • For respondent Nos. 1 to 3 and 14 (CBIC authorities): Mr. Dominic Fenandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC)

Relief Initially Sought in the Writ Petition

The assessee sought a Writ of Mandamus (or any other suitable writ/order) essentially praying for:

  • Setting aside:

    • The Order-in-Original dated 15.1.2025, and
    • The Summary of Order in Form GST DRC-07 dated 6.2.2025,

  • These orders related to levy of tax and penalty aggregating to Rs.5,93,97,436/- for the financial years:

    • 2017-18
    • 2018-19
    • 2019-20
    • 2020-21
    • 2021-22
    • 2022-23

  • The levy was made under Section 74 of:

    • Central Goods and Services Tax Act, 2017, and
    • Telangana Goods and Services Tax Act, 2017.

The impugned orders were challenged as:

  • Unconstitutional
  • Without authority of law
  • Without jurisdiction
  • Barred by limitation
  • Legally unenforceable
  • Contrary to notifications and circulars issued from time to time by the 3rd respondent
  • Contrary to various judicial precedents
  • Violative of Article 14, Article 19(1)(g) and Article 265 of the Constitution of India

The assessee also prayed for such further orders as the Court might consider appropriate in the facts and circumstances.

Grounds Urged Before the Court

Challenge to the Order-in-Original and DRC-07

In the writ petition, the assessee alleged multiple infirmities in the adjudication, including:

  • Failure to consider factual aspects such as:
    • Voluntary payments allegedly made prior to the issuance of show-cause notice.
  • Jurisdictional objections under Section 74 of the CGST and TGST enactments.
  • Limitation-related issues in issuance of the show-cause notice and passing of the final order.
  • Alleged inconsistency with:
    • Notifications, circulars, and instructions issued by the competent GST authorities (3rd respondent).
    • Judgments and orders of various Courts applicable to similar issues.

The overall thrust was that the proceedings and resultant demand were constitutionally and legally unsustainable.

Shift in Relief Sought During Hearing

Request to Avail Statutory Appeal Instead of Writ Remedy