Telangana HC Orders Review of GST Refund on Garnishee Recovery Before Appeal Period Ends

Phoenix Spaces (Guntur) Private Limited Vs Additional Commissioner of Central Tax (Telangana High Court)

Telangana High Court Directs Consideration of Refund of Amount Recovered Through Garnishee Proceedings Before Expiry of GST Appeal Period  

The Telangana High Court directed the GST authorities to consider the taxpayer’s refund application where the entire tax demand had been recovered through garnishee proceedings before the expiry of the statutory period available for filing a second appeal before the GST Appellate Tribunal (GSTAT). The Court observed that the amount recovered had already been re-credited to the taxpayer’s Electronic Cash Ledger and therefore the refund request deserved consideration in accordance with law.

Introduction

In Phoenix Spaces (Guntur) Private Limited v. Additional Commissioner of Central Tax & Others, the petitioner challenged the recovery of GST dues through attachment and debit of its bank account while the statutory remedy of second appeal remained available.

The dispute centered on whether the amount recovered by the department and subsequently re-credited to the Electronic Cash Ledger could be refunded to the taxpayer pending exercise of appellate remedies.

Facts of the Case

The petitioner was subjected to an Order-in-Original dated 24.12.2024, whereby:

• GST liability of ₹1,11,71,740/- was imposed.
• Interest and penalty were also levied.

Subsequently: