Judgment
HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE SEVENTEENTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE THE CHIEF JUSTICE SRI APARESH KUTIIAR SINGH AND THE HONOURABLE SRIJUSTICE G.M. MOHIUDDIN WRIT PETITION NO:4426 OF 2026 Between:
Medchal Lakdi ka I34881 GST Pul, Alokadcj Holdings Pvt. Ltd., GSTIN. 36AAQCA6337D1ZL U, MlG, Dharma Reddv Colony, Phase ll, Vasanth Nagar, Kukatpally, Hyderabad - Telangana - 5OOO72 Repiesented by its Authoriied Signatory Mr. Ashok Kuinar Reddy, S/o. P Aswartha Reddy Aged about42 Years, Rl/o. Ananthapur AND I ...PETITIONER Commissioner of Central Tax, Central Excise and Service Tax Medchal Commissionerate Medchal GST Bhavan, 114-64918, Lakdi ka Pul, Hyderabad - 500 004.
2. Joint Commissioner of Central Tax, Medchal GST Commissionerate Medchal GST Bhavan, 114$4918, Lakdi ka Pul, Hyderabad - 500 004.
3. Assistant Commissioner, CGST. Kukatpally Division, Commiseionerate Medchal GST Bhavan, 114-6/.918, Hyderabad - 500 0M.
4. Superintendent CGST, KPHB Range, Kukatpally Division Medchal G-ST Co'mmissionerab Medchal GST -Bhavan, '114-64918, Lakdi ka Pul, Hyderabad - 500 004.
...RESPONDENTS Petition under Article 226 ot 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, order or direction, more particularly the nature of a writ of mandamus declaring the show cause notice daled 0210512025 bearing OR No.
1212025-26-Ad1n(Medchal)-GST and the consequent order bearing O.R.No.
12t2025-26-Adjn(Medchal)-GsT dated 2811012025 along with the DRC 07s bearing Reference No. 2D3611250483499 and 2D361125048364H as being
void, illegal, arbitrary, without jurisdiction and violative of Articles 14 and 265 of the Constitution r>f lndia and consequently set aside the same lA NO: 1 OF 202ti Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the writ petition, the High Court may be pleased to stay all furth,ar action including collection of tax pursuant to order bearing O.R.No. 12l212lr-26-Adjn(Medchal)- GST dated 2811012025 along with the DRC 07s bearing Refr:rence No. 2D3611250483499 and 2D361125048364H, pending disposal of the urrit petition.
Counsel for the Petitioner: SRI M.NAGA DEEPAK Gounsel for the Respondents: SRI DOMINIC FERNANDES, Sr. SC FOR CBIC The Court made, the following: ORDER
IN THE HIGH COURT FOR TIIE STATT] OII'I'IiLANGANA AT HYDERABAD The Hon'ble The Chief Justice Sri Aparesh Kumar Sineh and The Hon'ble Sri J G.M.Mohiuddin Writ Petition ot2026 Datedz 17.02.2026 Between:
Alokadci Holdings Pvt. Ltd, GSTIN: 36AAQCA6337 D[ZL, 84 MlG, Dharma Reddy Colony, Phase II, Vasanth Nagar, Kukatpally' Hyderabad, rep. by its Authorised Signatory IVlr. Ashok Kumar Reddy, S/o P.Aswartha Reddy ...Petitioner and Commissioner of Central Tax, Central Excise & Service Tax, Medchal Commsisionerate Medchal GST Bhavan, ll-4-64918, Lakdi lia Pu!, Hyderabad and 3 others ...Respoudents Order:
Heard Mr. M.Naga Deepak, learncd coutrsel tbr the petitioner and IvIr. Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC) appearing for the respondents.
2.
The Order-in-Originat dated 28.10.2025, passed by the Joint Commissioner of Central Tax, Medchal GSl' Commissionerate, imposing upon the petitioner, penalty ol'1ts.3,49.7.i.688/- equal to the :
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ITC frauduk:ntly availed, without the actual receipt of goods during the period fi'om May,2018 to June 2019 under Section 122(l)(vii) read with Se'ction 74 of the of the central Goods and Services Tax Act, 2Ol7 and 'felangana Goods and Services Tax Act, 2017 (CGSTfl'GSI Act) and Section 20 of the Integrated Goods and Services Tax Act, 2017 (IGST Act) and further, penalty of Rs.3,50,19,7971- equal to the ITC fraudulently passed on during the period May, 20 l8 to June,2019, by way of issuance of tax invoices without actuLal supply of goods under Section 122(l)(ii) read with Section 74 c,f thc CGST/TGST Act and Section 20 of the IGST Act, has bcen assnilecl in this Writ Petition.
3.
The r;how cause notice was issued . upon the petitioner on 02.05.2025 by respondent No.2-Joint Commissioner of Central Tax, Mcdch.al GS'l Commissionerate, i.e., the same Officer, who passed the impugned Order-in-Originali The show cause notice alleged fi'audulent availment of Input Tax Credit (ITC) and passing of ITC on fakt: invoices without actual supply of goods. As per the show cause notice, the ITC available in the electronic credit ledger of the tax period appeared to be ineligible in terms of Section l6(2)(b) of
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the CGST Act and issuance of tax invoices without underlying supply of goods/services appeared to be in violation of Section 3l of the CGST Act. It also proposed penalty, for offences listed at Clauses (vii) and (ii) of Section 122(L) of the CGST/TGST Act read with Section 20 of the IGST Act, of an amount equivalent to the ITC passed on. The petitioner did not file reply to the summons. [{e was granted personal hearings on 15.09.2025, 15.10.2025 and 27.10-2025, but no response was received on all such occasions. No further adjournment was granted, taking note of Section 75(5) of the CGST Act, by the proper officer, while proceeding to confrrm the demand and imposing the aforesaid penalty.
4.
tn the present Writ Petition, the jurisdicirott of the proper officer to initiate the proceedings and pass the impugned Order-in- Original have been assailed. Reliance is placed on Circular No.254l1 l,lzOzs-GST dated 27.10.2025, whereunclcr it is contended that, for the first time, jurisdiction was conferrecl rrpon the officers enumerated in Table-I provided thereunder to F)ass orders under Sections 74A,75(2) and 122 of the CCS'I' Act trr,tl the Rrrlcs rnade thereunder. It is submitted that earlier Notil'ication No.2/2017- r(
:.4rr Central Ta;< dated 19.06.2017, only confened jurisdiction over the areas defint:d to the proper officer in respect ofthe provisions ofthe CGST Act and IGST Act in exercise of the powers under Section 3 read with Section 5 of the CGST Act and Section 3 of the IGST Act.
Therefore, the impugned proceedings are without jurisdiction.
5.
Learrred counser for the petitioner has also submitted that the administrative/executive orders or circulars cannot be applied retrospectively as held by the Apex Court in Bharat Sanchar Nigam Ltd. And others v. M/s. Tata Communications Ltd. Etcr.
Therefore, the impugned proceedings are bad in law.
6.
l.carned Sc.ior Standing Counsel for CBIC has drawn the attention of this Court to Sections 7ae) and 75(13) of the CGST Act in support 'f his subrnission that the proper oflicer, who initiated proceedings under Scction 7a() of the. ccsr Act cannot initiate separate proceedings tbr lerry of penalty in view of Section 75(13) thcreof. As such, the proceedings for levy ofpenalty undcr Clausr:s (vii) a,d (ii) oFsection 122(l) of IteCGST/TGST Act werr initiated togerher with the proceedings under Section 7a0) of I 2022 l,ivet.aw (SC) 79j
5 the CGST Act and Section 20 ofthe IGST Act. The penalty imposed under Section 122(l)(ii) and 122 (l)(vii) read with 74(l) of the CGST/TGST Act are, therefore, not without jurisdiction. lt is further pointed out that the same officer f.e., Joint Commissioner of Central Tax, Medchal GST Commissionerate has initiatecl proceedings and has also passed the impugned Order-in-Original dated 28.10.2025, after issuance of the Circular dated 27.10.2025. Therefore, the impugned Order-in-Original does not suffer from any want of jurisdiction.
7.
Learned Senior Standing Counsel for CBIC has relied upon a decision of the Delhi High Court in Devender Singh v. Additional Commissioner, Central Goods and Services Tax, Delhi West2, rendered in similar circumstances when jurisdiction ol' the proper off,rcer was questioned in the light of the Circular dated ?7.10.2025.
lt is submitted that the present case is. on a bettcr fcloting since the impugned Order-in-Original has been passed aftcr issuance of the Circular dated 27.10.2025. It is submitted that t'hercflore, the ptea of tack ofjurisdiction is not made out to interftre in the rllatter.
a / ' 1zoz,l1 180 raxnrann.com 490 (Delhi) /
6 8.
We trave heard learned counsel for the parties and taken note of the materials placed on record, the relevant provisions of the CGST Act and IGST Act and also perused the decisions cited on their behalf 9.
In tLe insranl. case, t}re proceedings were initiated by Joint commissioner of (rcntral rax, Medchal GST commissionerate, by issuance o[' shorv cause notice dated 02.05.2025, invoking the provisions of Section r2z(r)(ii)and 122(l)(vii) read with Sections 16, 50, 74 of thc CGS I' Act and Section 20 of the IGST Act. [t is not the case of the petitioner that the proper oflicer was not clothed with the jurisdiction to initiate proceedings under section 74 of the CGST Act.
Under sub-section (9) thereof, the proper officer can levy penalty, upon bei^g satisrlcd ot" the evasion of tax of an amount equal to the tax. In thc instant case, the same Officer, who had issued the show cause notic,: datcd 02.05.2025, had passed the impugned Order-in_ Original dared 28.10.2025, after iss'uance of Circular dated 27.10.2025. Tlrcrcfore, on the date of passing of the impugned Order-in-Original dated 28.10.2025, respondent No.2_ Joint Cornrnissioner ol' Clentral Tax, Medchal GST Commissionerate r.e., the Propcl Officcr had the jurisdiction to impose penalty under I
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Section 122(lXii) and 122(lXvii) of the CGST/TGST Act for having passed on fraudulent ITC and issuance of frke invoices without actual supply of goods, which were in teeth of Section l6(2Xb) of the CGST Act.
10. Section 160 of the CGST Act deals with the Assessment Proceedings, etc.,not to be invalid on certain grounds. As per Sub- Section (1) thereof, no assessment, reassessment, adjudication, review, revision, appeal, rectification, notiCe, Summons or other proceedings done, accepted, made, issued, initiated. or pulported to \ have been done, accepted, made, issued, initiated in pursuance of any of the provisions of this Act shall be invalid or deemed to be invatid nterely by reason of any mistake, defect or ornission thercin, if such assessment, re-assessment, adjudication, review, revision, appeal, rectification, notice, summons or other proceedings are in qubstance and effect in conformity with or acconding to the intents, purposes and requirements of this Act or any. existing law. As per sub-section (2) thereof, the service of any notice, order or communication shall not be called in question, if the notice, order or communication, as the case may be, has already been acted upon by I :I
8 the person lo whorn it is issued or where such service has not been called in question at or in the earlier proceedings commenced, continued or tlnalised pursuant to such notice, order or communlcal.lon.
ll. In ths insrant case, the petitioner did not file a reply or participate irr tlrc Pcrsonal hearings and did not question the issuance of notice on lack of jurisdiction. The show cause notice dated 02.05 2025 r.as acted upon, leading to passing of the impugned Order-in-Original dared ZB.|O.2OZS, when, respondent No.2_ Joint cornmissioner of ce,tral Tax, Medchal GST commissionerate, had the jurisdiction ro pass the impugned order-in-originar by virtue of the Circular darcd 17. 10.2025.
12. [n l)cvender. Singh (supra), Delhi High Court had upheld the Order-in-Origi.al <lated 28.07.2025, passed by the Additionat commissiorrer, rhrugh it was passed prior to the issuance of circular dated 27.10 2025,.s he was the same officer duly empowered under Section ll? oltlrc (t(iS'f Act.
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13. In the totality of the facts and circumstances and reasons recorded hereinabove, we are of the considered opinion that the point of jurisdiction raised by the petitioner is not tenable in law and on facts 14. The instant Writ Petition is, accordingly, disrnissed. I{owever, petitioner is granted to liberty to avail the remedy of appeal taking all grounds on facts and in law as are available to it.
15. Needless to say, if the petitioner prefers an appeal with a delay condonation application upon expiry of the period of limitation, the appellate authority would consider it in accordance with law and the period during which the petitioner was pursuing the writ remedy before this Court, shall stand excluded. No costs- , As a sequel, miscellaneous petitions, pcrrciing il' irny, stand closed.
SD/.L. VIJAYA ISTANT //TRUE COPY// SECTION OFFICER 1. One CC to SRI M.NAGA DEEPAK, Advocate 2. One CC to SRI DOMINIC FERNANDES, Sr. SC FOR CBIC [OPUC] 3. Two CD Copies / I \ To, BS $
f I HIGH COURT DATED: lV 10212026 ORDER WP.No.4426 oJ 2O2G DISMISSING THE WRIT PETITION, WTHOUT COSTS I IHE S t * a C' 1 B tt [q ,'ll/6 (-u 2a.
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