Case Law Details
Krishna Automotives Vs Deputy Commissioner of State Tax (Telangana High Court)
Summary: The Telangana High Court ruled on a petition filed by Krishna Automotives, challenging an order dated December 27, 2023, issued by the Deputy Commissioner of State Tax. The case marked the second instance of the petitioner seeking judicial relief, following an earlier writ petition (WP No. 7919 of 2024) in which the court had already quashed the original show-cause notice (Form GST DRC-01 dated September 29, 2023) and the corresponding order due to non-compliance with Rule 26(3) of the CGST Rules, 2017. Despite this, the tax department proceeded to issue the impugned order based on the same quashed notice, prompting the petitioner to challenge its validity once again.
During the hearing, the Assistant Government Pleader acknowledged the department’s error in relying on a legally non-existent show-cause notice (SCN). The court ruled that the impugned order could not withstand judicial scrutiny and set it aside. However, it granted liberty to the tax authorities to take appropriate action in accordance with the law. Additionally, the court clarified that the period during which the writ petition was pending would not count toward the limitation period for any future proceedings. The decision underscores the importance of procedural compliance in tax enforcement.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Sri Venkata Prasad, learned counsel for the petitioner and Sri T. Chaitanya Kiran, learried Assistant Government Pleader representing on behalf of Sri Swaroop Oorilla, learned Special Government Pleader for State Tax, appears for respondent Nos.1 to 3.
2. With the consent, finally heard.
3. During the course of hearing, the parties agreed that this is second visit of the petitioner to this Court. Earlier, the petitioner filed WP.No.7919 of 2024 against the Original in Order, dated 27.12.2023 (0.1.0.). This Court decided the said matter and the operative portion of the same reads thus:
“Considering the judicial precedents referred to in the preceding paragraphs, we are of the considered opinion that the impugned order in the instant case also since it is an unsigned document which lose its efficacy in the light of requirement of Rule 26(3) of the CGST Rules, 2017 and also under the TGST Act and Rules, 2017. The show cause notice as also the impugned order both would not be sustainable and the same deserved to be and is accordingly set aside/quashed. However, the right of the respondents would stand reserved to take appropriate steps strictly in accordance with law governing the field.
Accordingly, this writ petition stands allowed. No order as to costs.”
4. Learned counsel for the petitioner submits that the impugned order dated 27.12.2023 (Ex.P.1) is founded upon Form GST DRC-01, dated 29.09.2023, which has already been set aside in the previous round. Learned counsel further submits that once the show-cause notice and final order were set aside, it was no more open to the Department to pass the impugned order on the basis of such show-cause notice, which did not exist in the eyes of law.
5. Learned Assistant Government Pleader fairly submits that projection of facts are indeed correct and the Department has committed an error in proceeding on the basis of show-cause notice, which stood quashed by this Court.
6. In this view of the matter, the impugned order founded upon such non-existing show-cause notice cannpt sustain judicial scrutiny. Therefore, the impugned order is set aside. Liberty is reserved to the respondents to proceed against the petitioner, in accordance with law. The hurdle of limitation will not come in the way of Department for a period this writ petition was pending before this Court.
7. Accordingly, the Writ Petition is disposed of. No costs.
Interlocutory applications, if any pending, shall also stand closed.