M/S. Shalimar Industries vs. Assistant Commissioner
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Cause title — parties, addresses and appearances
The Court made the following: ORDER
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON'BLE THE CHIEF JUSTICE SRI APARESH KI'MAR SINGH AND THE HON'BLE SRI JUSTICE G.M.MOHiUDDIN WRIT PETITION No.17496 of 2026 Dated:12.06.2026 Between: IWs. Shalimar Industries ...Petitioner and Assistant Commissioner, Office of the Assistant Commissioner of Central Tax, Nizamabad Division, Medchal Comrnissionerate, KNAR Estate, 3'd Floor, Nizamabad - 503 001, and 4 others. ...Respondcnts ORDER: Learned counsel Sri K.P.Amarnath Reddy appears for the petitioner. sri Dominic Fernandes, Iearned senior Standing counsel for central Board of lndirect Taxes and customs (GBIC), appears for respondents No.l to 3. 2
I{eard the learned counsel for the parties.
Both the order-in-original dated 17.11.2024 along wirh the summary of the order in Fonn GST DRC-07 dated 21.11.2024 and the appellate order dated 12.03.2026 pertaining to the linancial years 2017 - 18 to 2022 - 23 are under challenge by the petitioner, whereby the respondents have fastened GST liability, including Reverse Charge Mechanisrn (RCM) liability on raw cotton transactions, despite the petitioner's specific contention that the purchases were made for trading purposes
The impugned proceedings have been conducted by invoking both Sections 73 and 74 of the Central Goods and Services Tax Acr, 2017 (hereinafter referred to as, "the Act"). After availing the appellate reuredy, the petitioner has approached this court rvith the contention that the appellate authority failed to appreciate the detailed explanations, invoices, e-way bills, bank statements, reconciliation statements and other supporting documents furnished by the petitioner while rnechanically confirming the demand. The respondents wrongly treated the petit"ioner's purchases of raw cotton as attracting RCM liability, despite specific contention and documentary proof that such purchases rvere made for trading purposes and not tbr ginning activities. l'he /
J It \ order-in-original and the appellate order were passed without proper consideration of the petitioner's submissions and evidence. They are cryptic, unsupported by reasons and reflect complete non-application of mind. The petitioner is aggrieved by the confirmation of demand, interest and penalty aggregating to Rs.1,54,33,2581- for the period covering 2017 - 18 to 2022 - 23. 5. Learned counsel for the petitioner has taken the plea that for the previous years where the proceedings under Section 73 of the Act have become time barred, the proper ottcer has deliberately invoked Section 74 of the Act without its ingredients, just for the purpose of availilg the extended period of limitation. Learned counsel for the petitioner, therefore, submits that a composite order both under Sections 73 and74 of the Act could not be passed in respect of different financial years without the ingredients of Section 74 of the Act being satisf,red and also without consideration of the documentary evidence and the specific contentions of the petitioner etc. The matter may therefore be remanded for reconsideration by the appellate authority.
The matter was adjourned ycstcrday for the learned Senior Standing Counsel for CBIC to seek instructions.
4 7 ' Today, the learned senior standing counsel for cBIC submirs, on instructions, that the matter may be remanded to the appellate authority to reconsider these issues in accordance with law.
I{aving regard to the aforesaid facts and circumstances and the submissions of the leamed counsel for the parties, the impugned order_ in-appeal dated 12.03.2026 is set aside and the rnatter is remanded to the appellatc authority to pass a fresh order in accordance with law after an opportunity o[ hearing to the petitioner. Since the matter is being remanded, the petitioner is allowed liberty to raise additional grounds rv'ithirr a period of two weeks frorn today. () '['hc writ petition is accordingly disposed of. There shail be no order as to costs Miscellaneous applications pending, if any, shall stand closed. '. A.V.S. PRASAD DEPUW REGISTRAR \ t //II SECTION OFFICER
Assistant Commissioner,, Office of the Assistant Commissioner of Central Tax, Nizamabad Division, Medchal Commissionerate, KNAR Estate, 3rd Floor, Nizamabad-sO3 001. 2. Assistant Commissioner of Central Tax,, Circle Vl, Office of the Commissioner of Central Tax and GST, Hyderabad Audit-ll Commissionerate, Group 62, Door No.1-98/8/20, 21, Sanvi Yamuna Pride, Krithika layout, Madhapur, Hitech City, Hyderabad-S0O 081
Additional Commissioner of Central Tax and GST, (Appeals-ll), Office of the Commissioner of Customs and Central Tax, Appeals - ll Commissionerate, 7th Floor, GST Bhavan, L.B.Stadium Road, Basheerbagh, Hyderabad-500
The Principal Secretary to Government, Revenue (CT-ll) Department, Secretariat, State of Telangana,, Hyderabad. a To, nI /
The Principal secretary, Government of lndia, Ministry of Finance,-3rd Floor' - .teevan Deep Building, Sansad Marg, Union of lndia,, New Delhi-1 10 001'
One CC to Sri K. P. Amamath Reddy, Advocate [OPUC]
One cc to sri Dominic Fernandes (senior standing counsel for cBlc) IoPUCI
One CC to Sri Bhuganga Rao' SC for Central Governement[OPuC] g. Two ccs to the GP for state Tax, High court for the state of Telangana, at Hyderabad[OUT] 1O.Two CD CoPies \ TJ J
I HIGH COURT DATED: 12lOGl2O26 ORDER 3 0B JUt 2[26 P-1 It ( o* 1HE SIa WP.No.17496 ot 2O26 DISPOSING OF THE WRIT PETITION WTHOUT COSTS * )s
Reproduced from the public record of the Telangana High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.