Case Law Details
Al-Habeebi Constructions Vs Superintendent of Central Tax (Telangana High Court)
The Telangana High Court considered a writ petition challenging the summary of a show cause notice in Form GST DRC-01 dated 21.05.2024 and the summary order in Form GST DRC-07 dated 27.08.2024 for the tax period September 2019 to March 2020. The petitioner stated that it became aware of the liability only upon receipt of a garnishee notice in Form GST DRC-13 dated 05.02.2026 attaching its bank account and also alleged that the impugned orders were unsigned. During the hearing, the petitioner sought liberty to file a statutory appeal, stating that there may have been delay in approaching the appellate authority. The respondents submitted that the order was digitally signed and that the petitioner could avail the appellate remedy. Without examining the merits, the High Court granted liberty to file an appeal within two weeks along with the statutory pre-deposit and a delay condonation application. The Court observed that the appellate authority should consider the issue of delay in light of the facts and circumstances and, if satisfied, decide the appeal on merits in accordance with law. The Court also directed that no coercive steps be taken pursuant to the garnishee notice during the two-week period for filing the appeal.
Introduction
In M/s. Al-Habeebi Constructions v. Superintendent of Central Tax & Others, the Telangana High Court reiterated that where an efficacious appellate remedy exists under the GST law, the taxpayer should ordinarily pursue that remedy rather than seek adjudication in writ proceedings.
Facts of the Case
The petitioner challenged the summary show cause notice in Form GST DRC-01 dated 21.05.2024 and the summary order in Form GST DRC-07 dated 27.08.2024 relating to the tax period September 2019 to March 2020. The petitioner asserted that it became aware of the demand only upon receipt of a garnishee notice in Form GST DRC-13 dated 05.02.2026 attaching its bank account and further alleged that the impugned orders were unsigned.
Petitioner’s Challenge
The petitioner sought liberty to file a statutory appeal, submitting that there had been some delay in approaching the appellate authority and requesting that such delay be considered sympathetically.
Revenue’s Stand
The Revenue contended that the order was digitally signed and that the petitioner was free to avail the statutory appellate remedy by raising all factual and legal grounds before the appellate authority.
Court’s Observations
The Court declined to comment on the merits of the controversy since the petitioner itself sought to pursue the statutory appeal. It observed that the appellate authority was the appropriate forum to examine both the issue of delay and the merits of the case.
Final Decision
The High Court granted the petitioner two weeks to file an appeal with the requisite pre-deposit and a delay-condonation application. The appellate authority was directed to consider the delay in light of the circumstances and, if satisfied, decide the appeal on merits. The Court also directed that no coercive action be taken pursuant to the garnishee notice during the said two-week period.
Key Takeaways
1. The existence of an effective appellate remedy ordinarily weighs against the exercise of writ jurisdiction in GST disputes.
2. Taxpayers who discover a demand only upon recovery proceedings may seek condonation of delay before the appellate authority.
3. High Courts may grant temporary protection from recovery to facilitate the filing of a statutory appeal.
Conclusion
The decision in M/s. Al-Habeebi Constructions underscores the Telangana High Court’s consistent approach of directing assessees to exhaust statutory remedies while ensuring that they receive a fair opportunity to challenge GST demands and seek interim protection from coercive recovery..
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Mr. Siddhardh Gilda, learned counsel for the petitioner appears through virtual mode.
Mr. Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC) appears for respondents No.1 and 2.
2. This Writ Petition is preferred against the summary of show cause notice in Form GST DRC-01 dated 21.05.2024 and summary of the order in Form GST DRC-07 dated 27.08.2024, issued by respondent No.1, for the tax period September, 2019 to March, 2020.
3. The petitioner has approached this Court alleging that it has come to know about the liability only upon the issuance of the garnishee notice in Form GST DRC-13 on 05.02.2026, for attachment of its bank account. It is also alleged that the impugned orders are unsigned.
4. However, after some arguments, learned counsel for the petitioner seeks liberty to the petitioner to prefer an appeal against the impugned order. He submits that some delay might have occurred in approaching the appellate authority and therefore, he may be directed to consider it sympathetically.
5. Learned Senior Standing Counsel for CHIC submits that the impugned order is digitally signed and therefore, the plea of unsigned is not sustainable. He further submits that the petitioner was at liberty to prefer an appeal against the impugned order taking all the grounds as are available in law and on facts before the appellate authority in respect of the subject tax period.
6. However, upon hearing the learned counsel for the parties, since the petitioner seeks liberty to prefer an appeal, we do not wish to comment on the merits of the contentions raised by the parties.
7. We grant liberty to the petitioner to prefer an appeal within a period of two weeks with statutory pre-deposit and a delay condonation application. The petitioner may take all such grounds of law and facts in the memo of appeal as are available to it. Needless to say, the appellate authority would consider the question of delay taking into account the aforesaid facts and circumstances and if he is satisfied on the point of delay, proceed to decide the appeal on merits in accordance with law. During the period of two weeks within which the petitioner has to file the appeal, no coercive steps be taken against the petitioner pursuant to the impugned garnishee notice.
8. The Writ Petition is accordingly disposed of with the aforesaid liberty. There shall be no order as to costs.
Miscellaneous applications pending, if any, shall stand closed.
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