Tanishq Garments Vs Assistant Commissioner of Central Tax (Telangana High Court)
Summary: The Telangana High Court disposed of the writ petition filed by Tanishq Garments by granting liberty to challenge the impugned GST order before the appellate authority within two weeks. The petitioner had sought quashing of Order-in-Original No. 14/2024-25 issued in FORM GST DRC-07 dated 20.08.2024 and consequential protection from recovery, including lifting of the bank attachment effected through FORM GST DRC-13. The petitioner also sought a declaration concerning the six-month time limit prescribed by Notification No. 22/2024-Central Tax dated 08.10.2024 for rectification in cases where input tax credit became available under Section 16(5) of the CGST Act, 2017.
The petitioner stated that it came to know about the liability only upon issuance of the garnishee notice in FORM GST DRC-13 for attachment of its bank account. During the hearing, however, learned counsel for the petitioner sought liberty to pursue the statutory appeal against the Order-in-Original and requested consideration of the delay in approaching the appellate authority. Counsel for CBIC submitted that the petitioner was at liberty to file an appeal against the Order-in-Original and DRC-07 and raise all grounds available in law and on facts.
Since the petitioner opted to pursue the appellate remedy, the High Court expressly declined to comment on the merits of the parties’ contentions. Accordingly, the Court did not adjudicate the petitioner’s substantive challenge based on Section 16(5), the validity of the time limit under Section 148 of the CGST Act or Notification No. 22/2024-Central Tax.
The High Court granted the petitioner liberty to file an appeal within two weeks along with the statutory pre-deposit and an application for condonation of delay. The petitioner was permitted to raise all grounds of law and fact available to it. The appellate authority was directed to consider the question of delay having regard to the facts and circumstances stated in the order and, if satisfied regarding the delay, proceed to decide the appeal on merits in accordance with law. The Court further directed that no coercive steps be taken pursuant to the impugned garnishee notice during the two-week period available for filing the appeal. The writ petition was accordingly disposed of without any order as to costs, and pending miscellaneous applications were closed.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Mr. Nishanth Rao KN, learned counsel appears for the petitioner.
Mr. Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC) appears for respondent Nos. I and 4.
2. The instant writ petition is filed for the following reliefs:
“For the reasons stated accompanying in the affidavit, is humbly prayed that this Hon’ble Court may be pleased to:
A. issue a Writ of Mandamus, or any other order or direction in the nature thereof, calling for the records relating to the impugned Order-in-Original No. 14/2024-25 in FORM GST DRC-07 dated 20.08.2024 bearing Reference No. ZD360824074279V passed by Respondent No. 1, and quash the same as being illegal, arbitrary. without jurisdiction, and contrary to Section 16(5) of the CGST Act, 2017;
B. Consequently, issue a Writ of Mandamus, or any other order or direction in the nature thereof, restraining the Respondents, their officers. agents, and subordinates, from taking any further steps or proceedings in furtherance of, or towards recovery of the demand confirmed under, the impugned Order-in-Original in DRC-07 dated 20.08.2024, including but not limited to the bank attachment effected vide FORM GST DRC-13 dated 22-06-2026, and direct that the said attachment be forthwith lifted;
C. Declare that the time-limit of six months prescribed under Notification No. 22/2024-Central Tax dated 08.10.2024, issued under Section 148 of the CGST Act, 2017, is ultra vires Section 148 of the Act and violative of Article 14 of the Constitution of India, insofar as it purports to extinguish the substantive statutory benefit conferred under Section 16(5) of the CGST Act, 2017, upon the lapse of the said period;
D. Consequently, issue a Writ of Mandamus or order or direction in the nature thereof directing Respondent No. 1 to receive and consider, on merits and in accordance with Section 16(5) of the CGST Act, 2017, an application for rectification of the impugned Order-in-Original dated 19.08.2024, to be filed by the Petitioner, notwithstanding the expiry of the period prescribed under Notification No. 22/2024-Central Tax dated 08.10.2024;
Pass such other orders, writs, or directions(s) as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case, and in the interest of justice.”
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 24.06.2026 for attachment of its bank account.
4. However, after some arguments, learned counsel for the petitioner seeks liberty to the petitioner to prefer an appeal against the order-in-original. He submits that some delay might have been occurred in approaching the appellate authority and therefore, he may be directed to consider it sympathetically.
5. Learned Senior Standing Counsel for CBIC submits that the petitioner was at liberty to prefer an appeal against the order-in-original and DRC-07 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 it 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.
