Judgment
I3488l rN THE HIGH couRT FoR THE srATE oF iefnruenr.rn AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE EIGHTH DAY OF APRIL TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE THE CHIEF JUSTICE APARESH KUMAR SINGH AND THE HONOURABLE SRI JUSTICE G.M. MOHIUDDIN WP.Nos.9166 AND 9354 OF 2026 WP NO: 9166 OF 2026 Between:
lvlr. Bharat Kumar Agarwal, S/o: late Sundermelji Aganrval, Age and 67 years, Occupation: Business, Address: B-2-6861K26t\ Road No .12, Banjara Hills Hyderabad-Telangana-500034 ...PETITIONER AND 1. Joint Commissioner (AE), Office of the Commissioher of Central tax, Central Excise and Service Tax, Medchal Commissionerate, Medchal GST Bhawan, i.l- 4-64918, lakdi-ka-pool, Hyderabad-500004 2. U,nion of lndia, rep. by its Secretary, Ministry of Finance, Jeevan Deep Building, 3'd Floor, Sansad Marg, New Delhi-l10 001.
3. State of Telangana, rep. by its Principal Secretary to Government, Revenue (CT-ll) Department, Secretariat, Hyderabad.
4. Central Board of lndirect Taxes and Customs, GST Policy Wing, Government of lndia, Ministry of Finance, New Delhi, rep. by its Commissioner (GST).
5. Goods and Services Tax Network, rep. by its Chairman, Worldmark I, Aerocity, lndira Gandhi lnternational Airport, New Delhi- 100 037 ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toto
issue a writ, order, or direction, more particurarry one in the nature of a writ of I\/andamus declaring that (a)declare that provisions of section 1?2(1A) are inapplicable for the period prior to the Section being effective i.e., 01.01 .2021 and hence it cannot be le'uied on the Petitioner (b)Set aside the adjudication order in order No 191/2025- ADJN(GST) dated 30.12.2025 arong with proceedings in Form DRC-07 vide Ref No.2D361225119626J dared:31j2202s(zo11-19), Ref No2D361225.1196883 dated:31 .12.2025(2019-20), Ref No.ZD361225i 197279 da1ed.31.12 2025(2020-2.t),Ref No 2D3612251197683 dated 3l '12.202s(2o21-22)and Ref No 2D361225119802J daled 31 12.2025 (2022-23) and show cause notice dated 27.06.2025 and Form DRC- 0'1 dated 28.06.2025 for the tax period 2018-19 to 2022-23 as being )issued by the 1st Rerspondent under section 74 of the GST Act for the tax period i.e. 2o1}-1g to 2o2z-2i as being without jurisdrction, in violation of principles of natural justice, it is devoid of any siElnature , contrary to the provisions of section 122(1A) and contrary to law and unsustainable on merits and to consequenfly set aside the same.
(Prayer amended as per Court order dt: gl4t26 vide l.A.No.2/26) l.A. NO: 1 OF 2026 Petition under section 151 cpc praying that in the circumstances stated in the aff davit filed in support of the petition, the High court may be preased to grant interim stay of all further proceedings pursuant to the impugned adjudication order Adjudication order in order No 191/2025-ADJN(GST) dated 30.i2202s arong with proceedings in Form DRC-07 vide Ref No 2D3612251'19626J dated 31 .12zo2s (2018-19), Ref No 2D3612251196883 dated 31 12202s (2019-20), Ref No 2D36122s1197279 dated 31 .12.2025 (2020-21),Ref No 2D3612251'r97683 dated 31 12202s (2021-22) and Ref No 2D361225119802J dated 3i.122025 (2022-23) and show cause notice dated 27.06 2025 and Form DRC-01 dated 28-062025 for the tax period 2o1B-19 to 2022_23 perrding disposal of the writ petition as otherwise the petitioner will be put to severe losr; and hardship.
(Prayer amended as per Court order dt: 814126 vide l.A.No.2/26)
Counsel for the Petitioner: MS. AKRUTI GOYAL Counsel for the Respondent No..l: SRl. DOM|NIC FERNANDES (sENtoR STANDtNG qOUNSEL FOR CB|C) Counsel forthe Respondent Nos.2,4 and 5: SC FOR CENTRAL GOVERNENT Counsel for the Respondent No.3: Gp FOR COMMERCIAL TAX WP NO: 9354 OF 2026 Between:
M/s Sugna Metal Limited,, Rep by its CFO, Mr, Ravi Kumar Garg, Son of Shri Tirath Prasad, Age. 36 years, Occupation. private Employment, Address. Sy.No.142 and '144, Laxmidevrapally Road, Narayanpur Village, pargi Mandal, Rangareddy, Telangana-50150'1 ,..PETITIONER AND 1. Joint commissioner (AE), office of the commissioner of central tax, central Excise and Service Tax, Medchal Commissionerate, Medchal GST Bhawan, 11- 4-64918, lakdi-ka-pool, Hyderabad-500004 2. Union of lndia, rep. by its Secretary, Ministry of Finance, Jeevan Deep Building, 3rd Floor, Sansad lvlarg, New Delhi-l l0 001.
3. State of Telangana, rep. by its Principal Secretary to Government, Revenue (CT- ll) Department, Secretariat, Hyderabad.
4. Central Board of lndirect Taxes and Customs, GST policy Wing, Government of lndia, Ministry of Finance, New Delhi, rep. by its Commissioner (GST).
5. Goods and Services Tax Network, rep. by its Chairman, Worldmark 1, Aerocity, lndira Gandhi lnternational Airport, New Delhi - '100 037 ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order, or direction, more particularly one in the nature of a Writ of Mandamus declaring that (a) Set aside the adjudication order in Order No 19112025- ADJN(GST) dated 30.12.2025 along with proceedings in Form DRC-07 vide Ref No.2D361225119626J dated: 31.12.2025 (2018-19) Ref No.2D3612251196883
dated:31.12.2025 (2019-20), Ref No.ZD36122s1197279 dated:31.12.202s (2020-21) Ref No 2D3612251197683 dated: 31 .122025 (2021;22) and Ref No 2D361225119802J dated 31 .122025 (2022-23) and show cause notice dated 2-;-06.2025 and Form DRC-OI dated 28.06.2025 for the tax period 201g-1g lo 2022-23 as; being )issued by the 1st Respondent under section 74 of the GST Act for the rax perriod i.e. 2018-19 lo 2022-23 as being in violation of principles of natural. justice is dervoid of any Signature, and contrary to raw and unsustainabre on merits. and to cc nsequently set aslde the same .
r.A. NO: 1 0F 2026 Petition under Section 151 cpc praying that in the circumstances stated in the aftldavit filed in support of the petition, the High court may be pleased to grant interim stay of all further proceedings pursuant to the impugned adjudication order Adjudication orrier in order No 191/2025-ADJN(GST) dated 30.12.202s along with proceedings in Form DRC-07 vide Ref No 2D36122s119626J dated 31.12202s (2018-i9), Ref No 21t3612251'196883 dated 31 12202s (2otg-zo), Ref No 2D3612251192279 dated 31 122025 (2020-21),Ref No 2D3612251'197683 dated 31 12.2025 (2021-22) and Ref Nc 2D3612251'19802J dated 31 12202s (2022-23) and show cause notice dated 27 06.2025 and Form DRC-01 dated 28.06.2025 for the tax period 2o1}-1gto2022_23 pe lding disposal of the Writ Petition as otherwlse the Petiiioner will be put to severe loss and hardship.
Counsel for the Petitioner: MS. AKRUTI GOYAL Gounsel for the Respondent No.1: SRl. DOMINIC FERNANDES (SENIOR STANDING COUNSEL FOR CBIC) counsel for the Respondent Nos.2,4 and 5: SC FoR CENTRAL GOVERNENT Counsel for the Respondent No.3: Gp FOR COMMERCIAL TAX The Court made the following: COMMON ORDER
IN THE IIIGH COURT FOR TIIE STATE OF TELANGAI.IA AT IIYDERABAD The Hon'ble The Chief Justice Sri Aparesh Kumar Sinsh and The Ilon'ble Sri Justice G.M.Mohiuddin Writ Petition Nos.9166 and 9354 of 2026 Dated: 08.04.2026 W.P.No.9l66 of 2026 Between:
Mr. Bharat Kumar Agarwal, S/o late Sundermelji Agarrval.
..-Petitioner and Joint Commissioner (AE) Office of the Commissioner of Central Tax, Central Excise and Service Tax, Medchal Commissionerate, Medchal GST Bhawan' # 7l-4-649 tB, Lzkdika-pool, Ilyderabad and 4 others ...RespondeIlts W.P.No.9354 of 2026 M/s. Sugna Metal Limited, Rep. by its CFO Mr. Ravi Kumar Garg, S/o Shri Tirath Prasad.
Aged 36 years.
...Petitioner and Joint Commissioner (^A.E) Office of the Commissioner of Central Tax, Central Excise and Service Tax, Medchal Commissiouerate, Medchal GST Bhawan, # ll-4-649 IB, Lakdi-ka-Pool, Hyderabad and 4 others ...Respondetrts Common Order:
Heard Ms. Akruti Goyal, leamed counsel appearing for the petitioners and Mr. Dominic Femandes, learned Senior Standing
7 Counsel for Central Board of Indirect Taxes and_ Customs (CBIC) appearing for the Central Tax.
2.
Pursuant to the show cause notice in Form GST DRC-01 dated 27.06.2025 issued upon both IWs. Suguna Metals Limited (petitioner in W.P.No.9554 of 2026) and its Managing Director (petitioner in W.P.No.9166 of 2026) (hereinafter referred as 'the company and its Managing Director'), the adjudication proceedings rvere held, which led to issuance of the impugned Order-in-Original dated 30.12.2025 and the summary of the order in Form GST DRC-07 dated 31.12.2025. However the impugned Order-in-Original dated 30.12.2025 has. in a composite mamer, imposed the tax liability upon the Company and its Managing Director under Sub-Section (9) of Section 74 of the Central Good and Services Tax Act, 2017 (for short 'the CGST Act') read u.ith Section 20 of Integrated Goods and Services Tax Act.20lt.in the lollowing manner:
"i. I confirm the demand of Rs.2,20,29,33 E/- (IGST Rs.30,60,2t84/-, CGST Rs.94.84.427l- & SGST Rs.9,1,84,,127l-) (Rupees Two Crores Twenty Lakhs Tuenty Nine Thousand, Three Hundred and Thrnl' eight only) being the irregular input tax credit of CGST availed and utilized on the invoices issued by the suppliers detailed supra, under the provisions of sub-section (9) of Section 74 of the CGST Act, 2017 rcad wirh Section 20 of the IGST Act, 2017 and corresponding Section of TSGST Act,20l7;
3 )t \ ii. I confirm the demand of Interest on the demand confirmed at Sl.No(i) above, under Section 50(3) of the CGST Act,20l7 read with Section 20 of the IGST Acl, 2Ol7 and corresponding Section of TSGST Act,2017;
iii. I impose penalty of Rs.2,20,29,3381 (IGST Ra.30,60,4841, CGST Rs.94,84,427l- & SGST Rs.9a,84,4271-), which is equivalent to the demand confirmed at Sl.No.(i) above, under Section 74(9) of the CGST Act, 2017 read with Section 20 of the IGST Act, 2017 and corresponding Section of TSGST Act,20l 7;
iv. I impose penalty of Rs 38,98,708/- (CGST Rs.19,49.354i- & SGST Rs.19,49,3541) being the input tax credit fiaudulently passed on by way of issuance of tax invoices without actual supply of goods/services, under section 122(l)(ii) of the CCSTICS f Act, 201 7 with read with Section 74(l) of the CGST/TGST Act, 2017 and corresponding Section of TSGST Act, 201'l ;
30. I impose the penalty of Rs'2,59,28,0461- (Rs.2,20,29,3 3 8/- for availing and utilizing fraudulent ITC & Rs.38,98,708/- for passing on of ITC without underlying supply of goods) on Shri Bharat Kumar Agarwal, Managing Director of I\4/s Sugna Metals f-imitea, urder Sec 122 (1A) for his act of omissions and commissions and being beneficiary of the transactions' 31. The proceedings initiated vide Show cause Notice vide OR No.29l2025-Adln (GST) Medchal (HQPOR No.2112024-25) dated 27.062025 issued by the Joint Commissioner of Central Tax, Medchal GST Commissionerate to M/s. Sugna Metals Limited, Hyderabad is accordingly disposed of in terms of this order."
3.
Petitioner in W.P.No.91 66 of 2026 does not have GST registration as he is the Managing Director of the Cornpany' However' in order to prefer an appeal as against the tax liability imposed upon him under Section 122(1)(a) of the CGST Act, separate Form DRC-07 has to 1
4 be issued. The compositc Form GST DRC-07 dated 31.12.2025 cannot be made the sub.ject matter ol appeal b1 him. He has other grounds also to assail the impugned Order-in-Original dated 30.12.2025. On earlier occasion. the matter was adjoumed to enable the leamed Senior Standing Counsel for CBIC to obtain instructions on the issue of temporary registration to the Managing Director (petitioner in W.P.No.9l65 of2026\.
1.
Today. leamed Senior Standing Counsel lor CBIC has relerred to Rule 16,{ of the Central Goods and Sen,ices Tax (amendment) Rules. 2025. as per rihich the proper Officer is empowered to grant temporary identification number and issue an orcler in part B of F.orm GST REG-12 1'he petitioner in W.p.No.9166 of 2026, being the Managing Dircctor of the Company, can apply for issuance of temporary registration numbcr/identification number physically to the Anti Evasion Officer. Lakdikapul. Medchat. He further submits rhat two separate Forrn GST DRC-07 ,. ould be issued afresh. one denoting the riability upon the Cornlranv (petitioner in W.p.No.93 5 4 of 2026) and the other denoting the liabilitl upon its Managing Direckrr (petitioner in W.P.No.9166 I
5 of 2026) so that both the Company and its Managing Director, if aggrieved, can prefer separate appeals.
5.
Learned counsel for the petitioners submits that there are other grounds also to assaiI the impugned Order-in-Original dated 30.12.2025.
as no separate charges were indicated in the show cause notice as against the Managing Director of the Company to offer proper reply.
6.
In the aforesaid facts and circumstances and upon consideration of rival submissions of leamed counsel for the parties, we are of the view that the Managing Director (petitioner in W.P.No.9i66 of 2026), after obtaining a temporary registration, is entitled to avail the remedy of appeal and take all such grounds on facts and in law as are available to him. The period of limitation would run only alter issuance of fresh Form GST DRC-07. The Managing Direcror (petitioner in W.P.No.9l66 of 2026) should make an application before the competent authority within a period of one week from today for issuance of temporary registration number/identification number. Within one week thereafter, the competent authority would issue the same to the Managing Director (petitioner in W.P.No.9166 of 2026).
7.
The revised two separate Form GST DRC-07 containing the liability as against the Company and its Managing Director be issued
To, 6 r.r'ithin a period of two weeks, so that the aggrieved parties may prefer separate appeals.
8.
With these observations and without going into the merits of the contentions ol the parties. both the Writ Petitions are disposed of. No costs As a secluel. rniscellaneous petitions, pending if any, stand closed SD/.T. SRIDEVI ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER '1 . Joint Commissioner (AE), Office of the Commissioner of Central tax, Central Excise and Service Tax. [v]edchal Commtssionerate, Medchal GST Bhawan, 1'1- 4-649 lB. lakdi-ka-pool,' Hyderabad-500004 2. The Secretary, Ministry of Finance, Jeevan Deep Building, 3rd Floor, Sansad lvlarg, Union of lndia. New Delhi-1 10 001.
3. The Principal Secretary to Government, Revenue (CT-ll) Department, Secretariat, State of Telangana, Hyderabad.
4. The Commissioner (GST),Central Board of lndirect Taxes and Customs, GST Policy Wing, Government of lndia, Ministry of Finance, New Delhi.
5. The Chairman, Goods and Services Tax Network, Worldmark 1, Aerocity, lndira Gandhi lnternational Airport, New Delhi - 100 037 6. One CC to lVs. Akruti Goyal, Advocate [OPUC] 7. One CC to Sri Dominic Fernandes (senior standing counsel for CBIC) tOpUCl 8. Two CCs to the GP for Commercial Tax, High Court for the State of Telangana, at Hyderabad[OUT] 9. One CC to SC for Central Government[OPUC] 10.Two CD Copies 1 B c,
HIGH COURT DATED: 0810412026 ORDER WP.Nos.9166 AND 9354 OF 2026 grr. 1 Ht s 6 t o LJ 1 6 Jrrll 2025 * .y * 9.fspnrc Hf-o DISPOSING OF THE WRIT PETITIONS WITHOUT COSTS (9'^t I \- 9\6\rc z c) I A