M/S Sri Infra vs. The State Tax Officer

Held

The Court noted that the petitioner, M/s Sri Infra, was not disputing the admitted liability but was seeking to pay it in installments. The Court acknowledged that a provision for installments for admitted liability exists under Section 80 of the TGST Act. The Special Government Pleader for State Tax confirmed this provision and stated that the petitioner's application would be considered in accordance with law if liberty was granted to approach the competent authority. Consequently, the Court allowed the petitioner liberty to approach the competent authority/Commissioner of State Tax within one week to apply for payment of admitted liability in installments. The Court directed that if such an application is made, the competent authority should consider it in accordance with law within two weeks thereafter. The writ petition was disposed of with this liberty, and no order was made as to costs. The issue regarding the legality and arbitrariness of the demand and the redetermination of ITC based on the circular was implicitly not decided as the petitioner focused on the installment payment.

Facts

The petitioner, M/s Sri Infra, filed a writ petition challenging proceedings in Form GSDRC-07 dated December 31, 2025, passed by the State Tax Officer. These proceedings confirmed a demand of Rs. 80,16,798/- along with a late fee of Rs. 56,400/- for the tax period April 2021-March 2022. The petitioner argued that the demand was illegal, arbitrary, and contrary to Circular No. 193/05/2023-GST dated July 17, 2023, and violative of Articles 14 and 19(1)(g) of the Constitution. The petitioner sought a fresh verification and redetermination of their Input Tax Credit (ITC) and permission to discharge any admitted liability in reasonable installments over twelve months. The petitioner also sought interim relief to prevent attachment of bank accounts.

Key Issues

1. Whether the demand confirmed in Form GSDRC-07 dated December 31, 2025, is illegal, arbitrary, contrary to Circular No. 193/05/2023-GST dated July 17, 2023, and violative of Articles 14 and 19(1)(g) of the Constitution of India? Petitioner's contention: The petitioner argued that the demand was illegal and arbitrary, and sought redetermination of ITC in accordance with the specified circular. They also sought to discharge admitted liability in installments. Revenue's contention: The Special Government Pleader for State Tax acknowledged the provision for installments under Section 80 of the Telangana Goods and Services Tax Act, 2017 (TGST Act). However, they noted that the petitioner had not annexed any application made to the competent authority with the writ petition. The revenue stated that if liberty was granted to approach the competent authority for payment in installments, the application would be considered strictly in accordance with law.