Judgment
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE EIGHTH DAY OF JUNE TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE THE CHIEF JUSTICE APARESH KUMAR SINGH AND THE HONOURABLE SRI JUSTICE G.M. MOHIUDDIN WRIT PETITION NO: 12213 oF 2026 [ 3488 I .....PETITIONER Between:
AND Mis. Divya Textile lndustries,, Survey No 257, plot No 22, lbrahimpatanam Khalsa Revenue Village lbrahimpatanim Mandai, R.R. Oist, tetangana, SOiStO Represented^ by its Proprietor, Mr. Sushil Kumar iatehpuria aged about6l years,.S/o. Shribhagwan Bajranglal Fatehpuria R/o. i_61b, nsniivad i;;, Jivkor Nagar, Bhatar Road, Surat-City, Gujarat 3S5OOZ.
1. The Assistant Commissioner, V^anasthalipuram _ 1 Circle, North Wing, gth Floor, Gagan Vihar Complex, Opp Gandhi Bhavan, Nampally, N;;i;rll;;
Hyderabad, Telangana - SO0 001.
2. Appellate Joint commissioner state Tax, secunderabad Division, Sth Froor, C.T.Complex, Nampally, Hyderabad, Telangana_ SOO OOt.
3 The state of rerangana, Ttrough principar secretary to Government Revenue Department (Commercial Tax), HyderabaO fetantina 4. Union of lndia,, Ministry_ of Finance, Represented by its Secretary, North Block, New Dethi - 1.10 001.
5. Central Board of lndirect Taxes and Customs, GST policy Wing, New Delhi Represented by its Commissioner.
.....RESPONDENTS Petition Under Arricre 226 of the constitution of rndia praying that in the circumstances stated in the affidavit fired therewith, the High court may be preased to issue a writ, order, or direction more particurarry one in the nature of a writ of Mandamus Declaring impugned show cause notice in Form DRC 01 vide Ref no.
F-' 2D3605240957217 dated 31 .0s.2o24 and an order in D,Rc-07 vide ref no.
2D360924002306K dated 02.09.2024 both issued by the 1st Fiespondent under the provisions of CGST/TGST Act, 2017 as being void, arbtrary, illegal, without jurisdiction and without authority of law apart from being violative of Articles 14, 19(1)(g) and 265 of the constitution of lndia, and to conseouenfly set aside any action taken pursuant thereto and pass such further or other orde(s) as this Hon,ble court may deem fit and proper in the circumstances of the case. ii)declaring the action of 2nd respondent in passing the appeal dismissal order in Appeal vide ref no. AD361125002741Kdated23.02.2026 and Form csrApL 02 instead of ailowing the appeal and disposing on merits, in the facts and circumsta nces of the case, as arbitrary, illegal, apart from being violatrve of Articles 1a, 19(1xg) and 265 of the constitution of lndia and provision of GST Act, 2017 , and to ccnsequenfly set aside any action taken pursuant thereto.
|.A.NO:1 OF 2026 Petition Under Section 'l5i cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to stay of operation of impugned order in DRC-07 vide ref. no. zD36)924002306K dated 02.09.2024 issued by the Respondent No. 1 for the tax pe,riod 2019-20 under CGST/TGST Acts, 2017 pending disposal of the above writ petition, as othenvise, the Petitioner will be put to severe loss and hardship.
Counsel for the Petitioner : SRI V.VEERESHAM counsel for the Respondent Nos.1 to 3 : M/s swARoop ooRrLLA, spEcrAL GOVT PLEADER FOR STATE TAX Counsel for the Respondent No.4 : SRI N.BHUJANGA RAO, DEpUTy SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.S : SRI D.RAGHAVENDAR RAO The Court made the following ORDER
ei:iL-_, *&F- :::1j:i152 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON'BLE THE CHIEF JUSTICE SRI APARESHKUMARSINGH AND THE IION'BLE SRI JUSTICE G.M.MOHIUDDIN WRIT PETITION No.1221 3 of2026 DATED: 08.06.2026 Between:
M/s. Divya Textile Industries, Survey No.257, Plot No.22, Ibrahimpatanam Khalsa Revenue Village, Ibrahimpatanam Mandal, R.R. Dist, Telangana 501 506 Represented by its Proprietor, Mr. Sushil Kumar Fatehpuria, S/o. Shribhagwan Bajranglal Fatehpuria . Petitioner ANT) The Assistant Commissioner, Vanasthalipuram-I Circle, North Wing, 8th Floor, Gagan Vihar Complex, Opp: Gandhi Bhavan, Nampally, Hyderabad, Telangana 500 001 & 4 others ... Respondents ORDER:
Heard Mr. v.veeresham, learned counsel appearing for the petitioner and Mr. Swaroop oorilla, learned Special Govemment pleader for State Tax appearing for the respondents.
2.
The impugned order-in-original dated 02.09.2024 pertaining to the tax period April, 2019 - March,2020 passed under Section 73 of the Telangana Goods and Services Tax Act, 2017 (hereinafter referred to as 'the Act') is under challenge
-r- 2 primarily on the ground that it is barred by limitation having been passed beyond the cut-off date i.e., 31.08.2024 for passing orders in respect of the proceedings for tax period 2019-20. Petitioner approached the appellate authority also, but by impugned order dated 23.02.2026 in Form GST APL-02, tht: same was dismissed Both the orders are under chailenge. The impugned order was passed on the basis of best judgment assessment as petitioner had not responded to the show cause notice and fi1e any reply.
3.
Pursuant to the time granted on 21.04.2026, the resltondents have filed a counter affidavit. Learned Special Government Pleader for State Tax has referred to the contents thereof, particularly paragraph Nos.6 and 7, which are specifically on the issue of uploading of the order beyond 31.08.20:t-4 i.e., the period of limitation. Paragraph Nos.6 and 7 are extracted hereunder:
"6. It is lespectfully subrnitted that for Financial Year 2019-20 the rime limit for passing orders under Section 73 stood extended up to 31.08.2024. At tl.u: relevant time, Shri Chisteshwar Polispatlola was functioning in his regular post as As:istant Commissioner, Rajendranagar-l Circle and simultaneously holding Full Additionirl Charge (FAC) of Vanaslhalipurarn-l Circle, as per order dated 18.05.2024 issued by Joint Conmrissioner.
Accordingly, all pending orders of both sircles had to be consecutively processed and uploaded using the same digital authentication belore midnight of 3r.08.2024. As per the administralive compilation for August 2024, Raj eudrtu.ragar- 1 Circle re lected 336 orders and Vanasthalipuram- 1 Circle reflested 158 order entries, totalling 494; berween 21.08.2024 and 31.08.2024 alone the con'esponding figures wcre 264 and 123. totalling 387; and on 31.08.2024 itself 36 and 29 orders respectively were passed till the last l.rour. 'IIie petitioner,s DRC-07 was processed/uploaded within the said tirr.re-bound rvindo*.
7. F'urther, it is submitted that by the time oforders were made ready atrd uploaded in respeot of 36 orders peftainirg to R-I circle and 29 orders pefiaining to Vana;thalipurarn-l circle if was I1:59 P.M of 31.08.2024. however, the order in respect of petitioner could not be \
..i: -;=::€i:.; :::*t5r 3 uploaded due to change ofday from Saturday to Sunday. Further the Sunday being the public holiday the order pertaining to petitiouer could not be uploaded on Ol.O9.2024 aud as such on the imrnediate next working day i.e., on Monday i.e.,02.09.2024 the order of the petitioners were uploaded in the GST common Web Portal. The non uploading of order ofthe petition on or before 31.08.2024 is neither willful nor wanton but for the above stated reason.,, 4.
The counter affidavit further states that the show cause notice quantified the discrepancies noticed in GSTR-09, GSTR-3B and connected records calling upon the petitioner to file objections in DRC-06 within the prescribed time. However, an ex parte order was passed since petitioner did not file written objections nor availed personal hearing despite three reminders/personal hearing opportunities issued through the common portal. The impugned ex parte order was passed for the Financial Y ear 2019-20 as the limitation was for passing the order was expiring on 31.08.2024. The Proper Officer of Vanasthalipuram-I Circle had to pass the order on the basis of the material then available on record. The impugned proceedings were either without jurisdiction or authority of law. According to the respondents, the substantive order was completed, but the later date reflected in the portal reference/RFN is only the date of system generatior/availability after submission and not the date on which the adjudicating mind was exercised. The proper officer was using a single DSC/digital key iinked to his login and had to process and upload a large number of time-bound orders for Rajendranagar-I circle and vanasthalipuram-I circle on 31.08.2024 up to the last hour. petitioner has not shown as to how it is prejudiced with the present impugned order being passed on 02.09.2024 instead of 31.08.2024 although the time limit for passing orders for the Assessment Year 2019-20 was extended up to 31.08.2024. Leamed Special
4 Government Pleader for State Ta,x, thereafter, referred to ,.he statement made at paragraph Nos.61 to 63 of the counter affrdavit, which are ex:racted hereunder "61. It is further submitted that a subsequent explanation dated 25.07 .'.\025, now relied upon by the peritioner, states that the differential IGST ITC of Rs.1,94,25,92 8/- represented import IGST paid on imported capital goods/machinery and that the same was not reflected in Table SA/GSTR-2A. The said explanation further states that the ITC treateC as inehgible related mainly to inward supplies such as works contract / electrical goods / ply.wood / hardware and allied items used for installation of the imported machinery. Thus, rccording to the later explanation, the core difference is import IGST ITC and installation-related ITC, and not fictitious credit.
62. It ls submitted that the petitioner filed the above reply and suppon ing documents within time in response to the show cause notice, the demand would have been examined on merits in the light of such documents and, on verification, would not have been conhrmed in the present form and would in all probability have been dropped in wholt or in substantial part on the maj or issues. The substantial difference, therefore, arose becausr ofnon-filing ofreply by the taxpayer and not because the adjudicating authority had before it the later documents and still chose to reject them.
63. It is submrtted that the answering respondent respectfully submits that, p/,im a facie arrd, subject to verihcation of the subsequently produced bills of entry and s.rpporting invoices, on the major issue there is no revenue loss, since the petitioner nou claims that the tax component was import IGST already paid tkough bills of entry and that the major inward supplies treated as ineligible were used for installation ofthe imported capital goods.,, 5. lt appears from a perusal thereof that on the basis of the subsequent explanation furnished oL25.07.2025, the differential IGST Il'C of Rs.1,94,25,9281- represented import IGST paid on imported capital goods/rrachinery and that the same was not reflected in Table 8A/GSTR-2A. The said explanation further states that the ITC was treated as ineligible related mainly to inrvard supplies such as works contract/electrical goodsipllavood/hardware and allied items used for installation of the imported machinery. According to the later explanation, the core
g:'.:'.:::.:=i::I'. .:a:::t::A 5 difference is import IGST ITC and installation-related ITC and not fictitious credit The respondents in the above paragraphs have further submitted that prima facie and subject to verification of the subsequently produced bills of entry and supporting invoices, on the major issue there is no revenue loss since the petitioner now claims that the tax component was import IGST already paid through bills of entry and that the major inward supplies treated as ineligible were used for installation of the imported capital goods. Learned Special Government Pleader for the State Tax at the end submits that even though the order has been uploaded on 02.09.2024 after expiry of the period of limitation but in view of the explanation fumished by the petitioner, the Department has found that there is no revenue loss on the major issue. However, he has not been able to justify as to how an order passed beyond limitation could be sustained in the eye of law.
6.
Learned counsel for the petitioner has referred to an order dared 12.06.2025 passed by this Court in W.P.No.10895 of 2025 (Annexure P10).
7 .
We have considered the submissions of learned counsel for the parties and taken note of the materials placed on record as above.
8.
On facts and after going through the order dated 02.09.2024 for the Financial Period April, 2019 - March, 2020 vide Reference No.2D360924002306K, it is apparent that the impugned order has been passed after expiry of the period of limitation i.e.,31.08.2024 for the tax period 2019-20. The Deparrment in its counter affidavit has explained that it was occasion on account of the huge number
- of orders that the Proper officer had to pass for two Circles. The Department has also explained in its counter affidavit that on the basis of the subsequent explanation furnished by the petitioner, on the major issue ttrere is no revenue 1oss.
The question of limitation goes to the root of the jurisdir;tion to pass an order imposing tax liability upon the assessee. Since the order-in-original has been passed and apparently uploaded after the last date for passing orders by 31.08.2024 for the tax peiod 2019-20, it cannot be sustained in the eye of law. The appellate authority has also failed to appreciate the jurisdictional infirmity in the order-in- original while dismissing the appeal on grounds of delay. The impugned order-in- original and the order-in-appeal are accordingly set aside.
9.
The Writ Petition is, accordingly, a1lowed. However, there shall be no order as to costs Miscellaneous applications pending, if any, shall stand closed.
SD/.C. DEEPIKA //TRUE COPY// STANT REGISTRAR To \sEcTtoN OFFICER '1. The Assistant Com mlssioner Vanasthalipuram Opp . Gandhi Bh n, Nam C rcle North Wing, 8th pally, Nampally, Floor Gagan Vihar Com plex, Hyderabad Telangana - 500 00 1 1 SA 2 The Appeilate Joint Commissioner State Tax, Secunrjera bad Division 5th Floor, C.T.C omplex, Nampally, Hydera bad, Telangana_ o00 001 3. The principal Secretary to Government, Revenue Det,artment (Commercial Tax), State of Telanga na at Hyderabad Telangana 4. The Secretary, Union of lndia, Ministry of Finance, Nor:h Block, New Delhi 110 001 5. The Commissioner. Cer wing. New Delhi.
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HIGH GOURT DATED: 08/06/2026 ORDER WP.No.12213 ol 2026 ALLOWING THE W.P WITHOUT COSTS.
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