Shaheen Educational Services Private Limited vs. The Assistant Commissioner Of State Tax

Held

The Court did not delve into the merits of the contentions raised by the parties regarding the validity of the show cause notice, the order, or the recovery notice. Instead, the Court granted liberty to the petitioner to prefer an appeal against the impugned order within a period of two weeks, subject to statutory pre-deposit and filing a delay condonation application. The Court directed that the appellate authority would consider the question of delay sympathetically, taking into account the facts and circumstances, and if satisfied, proceed to decide the appeal on merits. During the two-week period for filing the appeal, no coercive steps were to be taken against the petitioner pursuant to the impugned recovery notice. The writ petition was disposed of with these directions.

Facts

Shaheen Educational Services Private Limited (the petitioner) filed a writ petition before the Telangana High Court challenging a show cause notice dated 29.09.2025, an order dated 08.12.2025, and a consequential recovery notice dated 18.07.2026. The petitioner alleged that the show cause notice and the order were unsigned and therefore invalid. The respondents were the Assistant Commissioners of State Tax and the State of Telangana. The recovery notice was addressed to HDFC Bank Limited. The petitioner sought to declare the notices and order as invalid, illegal, and without jurisdiction, or alternatively, to permit them to file a statutory appeal against the order with a direction to the respondent authorities not to initiate coercive recovery proceedings until the appeal was filed and considered.

Key Issues

1. Whether the impugned Show Cause Notice in Form GST DRC-01 dated 29.09.2025, bearing an unverified digital signature, is invalid, non-est, and unenforceable in law? The petitioner argued that the notice was invalid due to an unverified digital signature. 2. Whether the impugned order in Form GST DRC-07 dated 08.12.2025 is arbitrary, illegal, without jurisdiction, contrary to the provisions of the CGST/TGST Acts, and violative of the principles of natural justice and Articles 14, 19(1)(g), and 265 of the Constitution of India? The petitioner contended that the order suffered from similar defects as the show cause notice and was passed without proper jurisdiction and adherence to natural justice. 3. Whether the recovery notice in Form GST DRC-13 dated 18.07.2026 issued to HDFC Bank Limited is arbitrary, illegal, without jurisdiction, and violative of Articles 14, 19(1)(g), and 265 of the Constitution of India? The petitioner argued that the recovery proceedings were initiated based on invalid notices and orders. 4. In the alternative, whether the petitioner should be permitted to avail the statutory remedy of appeal against the impugned order, with a direction to the respondent authorities not to initiate coercive recovery proceedings until the appeal is filed and considered? The petitioner sought this relief as a fallback option. The respondents argued that the petitioner was free to prefer an appeal and take all available grounds.