Case Law Details
Udeva Preci Steel Products Mft. Co. Vs Superintendent of Central Tax and Central Excise (Telangana High Court)
The Telangana High Court heard a writ petition challenging the order-in-original dated 08.12.2023 and the summary order in Form GST DRC-07 dated 28.12.2023. The petitioner contended that the adjudication order was passed without considering its reply dated 19.08.2023 and without proper verification of records, allegedly violating principles of natural justice and the procedure prescribed under the CGST Act, 2017. The petitioner also challenged the rejection of its rectification application dated 07.02.2024, which was rejected by order dated 28.01.2026.
The dispute related to the period from July 2017 to March 2018. According to the petitioner, certain suppliers had issued invoices and filed returns using GSTIN 32ZA due to lack of clarity, which resulted in mismatch between GSTR-3B and GSTR-2A/2B. The suppliers subsequently amended details on the GST portal for 2017-18. However, the department issued Form GST DRC-01A proposing a demand of Rs.15,37,411.74 alleging excess input tax credit for 2017-18.
The petitioner submitted that it had replied explaining that the mismatch arose because of the dual GSTIN issue and supplier errors, which required verification of amended invoices. Despite this, the proper officer passed the adjudication order demanding tax, interest, and penalty. The petitioner further argued that even the rectification application was rejected without proper application of mind.
The petitioner relied on a decision of the Allahabad High Court in M/s. Prakash Medical Stores vs. Union of India and 3 others, contending that the period spent pursuing the rectification application should be excluded under Section 14 of the Limitation Act, 1963 for the purpose of filing an appeal.
The department submitted that the petitioner had replied only to Form GST DRC-01A and had not submitted a reply to the show cause notice. However, it did not dispute that the time spent in pursuing the rectification application could be considered for limitation purposes.
The High Court held that the petitioner may approach the appellate authority by raising all grounds on facts and law. It directed that if an appeal is filed with the statutory pre-deposit and delay condonation application, the appellate authority should consider the delay after taking into account the period spent pursuing the rectification application and the writ proceedings. The Court clarified that it had expressed no opinion on the merits of the case and disposed of the writ petition without costs.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Heard Sri Singam Srinivasa Rao, learned counsel for the petitioner and Mr. Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC) appears for respondent Nos.1 and 2.
2. Petitioner has laid challenge to the order-in-original dated 08.12.2023 and summery of the order in Form GST DRC-07 dated 28.12.2023 on the ground that it was passed without considering his reply dated 19.08.2023 and without verifying the records, in violation of principles of natural justice and the procedure prescribed under the Central Goods and Services Tax Act, 2017 (for short, “the CGST Act”). Petitioner immediately thereafter filed a rectification application on 07.02.2024, which has also been rejected by order dated 28.01.2026 also impugned in the writ petition.
3. According to the petitioner, the adjudication proceedings relates to the period from July, 2017 to March, 2018 where due to lack of clarity some suppliers had issued invoices and filed returns using GSTIN 32ZA resulting in mismatch between the GSTR-3B and GSTR-2A/2B. The supplier made certain amendments in the GST portal in GSTIN applied for 2017-18. However, the respondent issued Form GST DRC-01A proposing demand of Rs.15,37,411=74 alleging excess ITC for 2017-18. Despite submission of a reply and explaining the mismatch due to the dual GSTIN issue and suppliers errors requiring verification of amended invoices, the proper officer conducted the adjudication proceedings and passed the order-in-original holding him liable to pay tax, interest and penalty. It is further submitted that the proper officer has not applied his mind and made the necessary corrections even on a rectification application made as would appear from a perusal of the order dated 28.01.2026 specially paras 9 to 13. Therefore, the petitioner has assailed both the proceedings.
4. Learned counsel for the petitioner has also relied upon a decision of the Allahabad High Court in M/s. Prakash Medical Stores vs. Union of India and 3 others1, wherein the period spent in pursuing the rectification application has been excluded by relying upon Section 14 of the Limitation Act, 1963 for the purposes of preferring an appeal. Learned counsel for the petitioner has therefore sought to assail the impugned orders on merits as well.
5. Learned Senior Standing Counsel for CBIC submits that the reply referred to by the petitioner is to Form GST DRC-01A, the intimation prior to issuance of show cause notice. He has however not submitted any reply to the show cause notice which led the proper officer to pass the impugned order-in-original. However, he does not dispute that since the rectification application was pending all along for about two years, the benefit of Section 14 would enure the petitioner to prefer an appeal to the impugned order-in-original.
6. Having regard to the facts and circumstances noted above and that the petitioner seeks to assail the findings of the proper officer on merits as well, we are of the view that the petitioner may approach the appellate authority taking all such grounds of law and fact. If such an appeal is preferred with statutory pre-deposit and delay condonation application, the appellate authority would consider the question of delay taking into account the period spent during pendency of the rectification application and also the period spent in pursuing the writ remedy before this Court. If the appellate authority is satisfied with the explanation for delay, he shall proceed to decide the appeal on merits in accordance with law. Let it be made clear that we have not made any comments on the merits of the case.
7. Accordingly, the writ petition is disposed of. There shall be no order as to costs.
Miscellaneous applications, if any pending, shall stand closed.
Note:
1 Writ Tax No.5865 of 2025, dt: 12.12.2025
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