M/S. Citadel Homes PVT LTD vs. Assistant Commissioner (St)
Facts
The petitioner, M/s. Citadel Homes Pvt. Ltd., filed a writ petition challenging an impugned show cause notice dated 29.09.2023 and an impugned order in Form GST DRC-07 dated 23.12.2023, issued by the Assistant Commissioner (ST). The challenge pertained to the tax period July 2017 to March 2018. The petitioner argued that the main demand arising from an order-in-original dated 14.07.2023 had been dropped in appeal proceedings by an order dated 05.03.2026 passed by the Appellate Joint Commissioner of State Tax. The petitioner contended that in light of the appellate order, the penalty proceedings should also be dropped. The respondents, including the Assistant Commissioner (ST) and the State of Telangana, were represented.
Held
The Court disposed of the writ petition by granting liberty to the petitioner to seek rectification of the impugned order dated 23.12.2023, which imposed a penalty. This liberty was granted despite the fact that the original demand had been set aside in appeal proceedings by an order dated 05.03.2026. The Court reasoned that if the petitioner files a rectification application within two weeks from the date of the order, the proper officer shall consider it in accordance with the law. The Court did not decide on the merits of the penalty itself but provided a procedural avenue for the petitioner to address the discrepancy. The ratio decidendi is that where an appeal order sets aside the primary demand, a consequential penalty order may be amenable to rectification if the original demand is no longer subsisting. No costs were awarded.
Key Issues
1. Whether the penalty proceedings initiated vide the impugned order dated 23.12.2023 should be dropped, given that the main demand arising from the order-in-original dated 14.07.2023 has been set aside in appeal proceedings vide order dated 05.03.2026? Petitioner's contention: The petitioner argued that since the primary demand has been dropped in appeal, the consequential penalty proceedings should also be dropped. They relied on the order dated 05.03.2026 passed by the Appellate Joint Commissioner of State Tax. Revenue's contention: The Special Government Pleader for State Tax submitted that the penalty order dated 23.12.2023 was challenged in the writ petition after some delay. However, if the demand has indeed been dropped in appeal proceedings, it is open for the petitioner to approach the proper officer for dropping the penalty demand by filing a rectification application.
Sections Cited
Section 129 (While not explicitly mentioned, penalty proceedings often relate to Section 129 or similar provisions for detention, seizure, and release of goods and conveyances in transit. However, the judgment does not specifically name any section of the CGST/SGST Act or Rules as being discussed or relied upon for the core decision regarding rectification. The decision is based on the procedural aspect of rectification following an appellate order.)
AI-generated summary — verify with the full judgment below
[ 3488 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (SPecial Original Juri iction) WEDNE AY, THE ELEVENTH DAY OF MARCH TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH AND THE HONOURABLE SRI JUSTICE G,M. MOHIUDDIN WRIT PETITION N0:7263OF 2026 Between: M/s. Citadel Homes Pvt Ltd, (Represented by its Managing . Directo| 4th ilior.-e-zlion6/1P,116,17,18 Asnor Hrtecn Chambers Road No 2, Banjata Hills, Hyderabad -500 034 ..PETITIONER AND 1 Assistant Commissioner (ST), M.G. Road-S.D. Road Circle' Begumpet -^^ ori.li" it.xJo-3-789, 4th Fioor Pavani Prestige, Ameerpet, Hyderabad - 500
State of Telangana, Rep. by its Secretary to Government (Revenue), State Tax Departmeht, Secretariat, Hyderabad. GSTN, Worldmark '1 , Aerocity, lndira Gandhi lnternational Airport, New Delhi ..RESPONDENTS Petition under Article 226 of lhe constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue a writ of Mandamus or any other appropriate writ or order or direction by setting aside the unsigned impugned show cause d1.29.O9.2023 vide Ref. r'\to. zoaooszao3332oP along w
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