Rythu Seva Kendram Bairanpally Vs Superintendent of Central Tax (Telangana High Court)
Telangana High Court Sets Aside GST Appellate Order Passed Without Hearing and Keeps Challenge to Section 16(2)(c) Open Analysis of M/s. Rythu Seva Kendram Bairanpally v. Superintendent of Central Tax
In an important ruling concerning appellate procedure, natural justice, and challenges to supplier default-based ITC denial provisions, the Telangana High Court in M/s. Rythu Seva Kendram Bairanpally v. Superintendent of Central Tax held that an appellate order rejecting an appeal without granting hearing cannot be sustained.
The judgment dated 30.03.2026 is particularly significant because it also addresses the increasingly litigated constitutional challenge to Sections 16(2)(c) and 16(2)(aa) of the CGST Act, while simultaneously protecting the assessee from coercive recovery during remanded appellate proceedings.
Background of the Dispute
The writ petition challenged:
- Appellate rejection order in FORM GST APL-02 dated 13.11.2025;
- Order-in-Original dated 13.02.2025;
- DRC-07 dated 20.02.2025; and
- constitutional validity of Sections 16(2)(c) and 16(2)(aa) of the CGST Act.
The petitioner also sought protection against recovery proceedings and bank attachment.
The dispute primarily arose from denial of Input Tax Credit (ITC), allegedly linked to supplier defaults under Section 16(2)(c).
Core Grounds Raised by the Petitioner
The petitioner argued that:
- the appellate authority rejected the appeal without granting opportunity of hearing;
- such rejection violated:
- Section 107(8),
- Section 107(11),
- Section 107(12) of the CGST Act; and
- principles of natural justice.
Additionally, the petitioner challenged the constitutional validity of:
- Section 16(2)(c), and
- Section 16(2)(aa),
contending that:
- purchasers should not suffer for supplier defaults;
- the provisions are arbitrary and violative of Articles 14, 19, 265 and 300A of the Constitution.
Revenue’s Position
