Mr. Yagyanand vs. State Of Telangana.
Original PDF →Facts
These two writ petitions concern a dispute over the GST registration and business succession of M/s. A.P. Products, a spices/masala manufacturer. The original proprietor, Sri Anand Swaroop Agarwal, died on December 9, 2019. His grandson, claiming under a Will dated October 11, 2019, obtained a fresh GST registration (No. 36ACPPY7866D1ZR) on January 3, 2020. Subsequently, the sons of Sri Anand Swaroop Agarwal, who formed a partnership after their father's death, also applied for and obtained a GST registration (No. 36ABQFA8812MIZU) on March 28, 2020, for the same business. The grandson alleged fraud and forged documents in the sons' registration, while the sons challenged the grandson's registration, claiming it was obtained fraudulently. The dispute over the validity of the Will and lawful succession is pending adjudication in civil courts.
Held
The Court held that the genuineness and validity of the Will dated October 11, 2019, which is central to the dispute over succession and business entitlement, is sub judice before the Civil Courts and has not been conclusively adjudicated. Therefore, the TSGST authorities do not have the jurisdiction to adjudicate on such civil disputes or conflicting claims like the authenticity of a Will or succession. The proper jurisdiction for these matters lies with the Civil Court. Consequently, the Court revoked the interim suspension of the GST registration certificate granted to the grandson (GSTN No. 36ACPPY7866D1ZR dated January 3, 2020) in WP/10470/2020, allowing I.A. No. 2 of 2020. The Court also directed that the State Tax authorities shall take action regarding the cancellation proceedings of the grandson's GST registration only after the determination of rights in the pending partition suit (O.S. No. 283 of 2020). Similarly, the Court revoked the interim suspension of the GST registration certificate granted to the sons (GSTN No. 36ABQFA8812MIZU dated March 28, 2020) in WP/10834/2020, allowing I.A. No. 1 of 2021. The Court directed the State Tax authorities to take action regarding the verification of the propriety and legality of the sons' GST registration only after the determination of rights in the said partition suit. The Court emphasized that substantive disputes regarding the Will, lawful succession, and entitlement to the business remain sub judice.
Key Issues
1. Whether the Telangana State Goods and Services Tax (TSGST) authorities have the jurisdiction to adjudicate on the genuineness and validity of a Will, which is a matter sub judice before the Civil Courts? (Question of law) 2. Whether the TSGST registration obtained by the grandson (Respondent No. 5 in WP/10470/2020) based on a Will dated October 11, 2019, is valid, given the ongoing dispute regarding the Will's authenticity? 3. Whether the TSGST registration obtained by the sons (Respondents 4-6 in WP/10834/2020) is valid, considering the allegations of fraud and forged documents, and the pending civil dispute over succession? Petitioner's Arguments (Sons in WP/10470/2020 and Grandson in WP/10834/2020): - The grandson (Respondent No. 5 in WP/10470/2020) argued that his GST registration was obtained based on a valid Will and that the sons' registration was fraudulent, using forged documents and misrepresenting facts, including a prior trademark infringement case. He relied on the Will dated October 11, 2019. - The sons (Petitioners in WP/10834/2020) argued that their GST registration was obtained legally and sought to set aside the grandson's registration, alleging it was obtained by fraud and forged documents. They also sought to prevent interference with their business operations except through due process of law. Revenue's Arguments: - The State Tax authorities (Respondents 1-4 in WP/10470/2020 and Respondents 1-3 in WP/10834/2020) contended that the validity of the Will and the lawful succession are matters for the Civil Court to decide, not the GST authorities. They sought guidance from the Court on how to proceed given the conflicting claims and pending civil litigation.
Sections Cited
CGST Act, 2017, Telangana State Goods and Services Tax Act, 2017
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Cause title — parties, addresses and appearances
The Court made the following: COMMON ORDER
6 .."; THEHON'BLETHE CHIEF JUSTICE SRI APARESiH KT'MARSINGH AND STICE G.M. MOHII'DDIN I.A.No.2 OF 2020 IN/AND WRIT PETITION No.1O470 0F 2020 AND I.A.No.1 OF 2021 IN/AND WRIT PETITION No.1O834 OF 2O2O COMMON ORDER: Since b,tth the writ petitions are integrally connected, they arc being disposed by this Common Order. W.P.No.l O470 ot 2O2O THE HON'BLE SRI JU
Heard Sri R.A.Achuthanand, learned counsel for the petitioners, S-i Swaroop Oorilla, learned Special Government Pleader for S-ate Tax for ofhcial respondent Nos.l to 4 and Sri Vedula Srinivas, learned Senior Counsel for respondent No.5 W.P.No.10834 of 2O2O:
Heard S:i Vedula Srinivas, learned Senior Counsel for the petitioner, Sri Swaroop Oorilla, learned Special llovernment Pleader for State Tax for ofhcial respondent Nos. 1 to 3 and Sri R.A.Achuthanand, learned counsel for the respondent Nos.4 to 6. 2
The core issue in these two writ petitions involves a dispute over the GST registration and business succession of M/s. A.P. Products (Anand Masala), a spices/ masala Sri Anand Swaroop Agarwal, who died on 09 '12'2019 '
Shorn of the unnecessary details, the factual background essential for the adjudication of the present writ petitions as culled out from the pleadings, is as under: i) that Sri Anand Swaroop Agrawal was the founder/ proprietor of M/s' A'P Products; ii) that Sri Anand Swaroop Agarwal as proprietor of M/s. A.P.Products was registered for State Tax and a registration certiltcate No 36AIRPS7783HIZA was issued in his name on 18'O7'2O 18; iii) that Sri Anand Swaroop Agarwal died on 09.12.2019; iv) that Sri Yagnanand Agarwal, who is the grandson of Sri Anand Swaroop Agarwal (hereafter 'grandson' for brevity), claiming under a Will of Sri Anand Kumar Agarwal dated 11' 10 2019 (hereafter lMill' for brevity) applied for a fresh registration under the provisions of the Telangana State Goods and manufacturer, after the death of its proprietor' i! ; I I
J S,:n,ice Tax Act, 20 17 (hereafter Act' for brevity) ar rd obtained registration certificate Nc.36ACPPY7866D 1ZR dated 03.0 1.2O!)0; v) tlLat the petitioner Nos.l to 3 in W.P.No.\O47O of 2(12O, u,ho are the sons of Sri Anand Swaroop Aganval (hereafter 'sons'for brevity), after the death o1 their father Sri Anand Swaroop Aganval formed a partnership, and applied for and obtained a rcgistralion certihcate bearing N:.36ABQFA88L2MIZU dated 28.03.202O in the namc of M/s. A.P.Products; vi) [L.at the 'grandson'filed O.S.No.3278 of 2019 on the llle of the VIII Junior Civil Judge, City Civil Court, Hrdcrabad seeking a permanent injunction rcstraining the'sons' from interfering wilh business cl M/ s. A.P.Products; vii) tl^at I.A.No.1415 of 2O l-9 hled in the said suit O S.No.3278 of 2019 for temporary injunction was dismissed by the Civil Court and thr: injunction rcfused holding that the Will' claimed to have been e>:ecuted by Sri Anand Swarooop Agarrrral in favour the 'grandson' appears to be forged; be it noted here that the 'grandson' hled CMA No.42 of 21O20 against
4 the order of dismissal of the said I.A.No.1415 of 2019; viii) that the 'sons' lodged a criminal complaint with the Police CCS, Hyderabad which registered a Crime in FIR No.2 of 2O2O against the 'grandson' and others under sections 42O, 465, 467 and 468 of iPC, wherein investigation is pending; ix) that the 'sons' hled O.S.No.283 of 2O2O on the file of the VIII Additional District and Sessions Judge, Ranga Reddy District for partition of the properties of Sri Anand SwarooP Agarwal; x) that the 'grandson' previously hled W.P.No.3453 of 2O2O before the High Court alleging the freezing of the bank account and interfering with the business of the hrm by police and the same was closed recording the statement made on behalf of the police that the bank account was not freezed and that the police was interfering with the business of the 'grandson'; xi) that the 'sons' made representation to the TSGST authorities dated 2a.O5.2O2O seeking the canceliation of registration certificate issued to the 'grandson' on the ground that it was obtained by ) / plalri.* fraud and on the basis ol forged and fabricated documents, which was disposed by the TSGST authorities with an Endorscment dated 24.06.2O2O refusing to cancel the tiST registration certihcate of the 'grandson'; xii) that the 'grandson' is seeking a declirration that issuing GST registration certihcate to the 'sons' for rl:nning the business in the nzrme ol M/s. A.P. Products at the same place of business, w'here GST registration of the 'grandson' was issued , is illegal;
W.P.No.lO47O of 2O2O is filed by the 'sons' and daughters of late Sri Anand Swaroop eg..*^f aggrieved Or] ,n" endorsement Tared 24.06.2020 of respondent No-4 refusing to cancel the GST registration of the 'grandson'.
W.P.No.1O834 of 2O2O is filed by the 'grandsc,n' seeking a declaration taat issuing GST registration certiilcate dated 28.O3.2O2O to the 'sons' for running the business in the same name of M/s. A.P. Products at the same place of business u'here GST registration of the 'grandson'was issued, is illegal.
Sri R.A.Achuthanand, learned counsel for the 'sons' contended thzrt the TSGST authorities issued the registration j j
6 certificate dated O3.O 1.202O to the 'grandson', on the basis of a forged and fabricated Will'. Learned counsel further contended that the Civil Court in I.A.No. 1415 of 2079 in O.S.No.3278 of 2019 had observed that the ll/ill' relied upon by the 'grandson' was forgcd and labrica t ed g. The learned counsel for the 'sons'also contended that the Assistant Commissioner of State Tax (respondent No.4) erred in stating in the impugned endorsement dated 24.06.2020 Lhat iL was not possible to initiate canccllation proceedings against lhe TSGST re gistration certihcate of the 'grandson' without any direction. The Iearned counsel further contended that the Assistant Conmissioner of State Tax (respondent No 4) has relied upon and misinterpreted the order of the High Court in W.P.No.3453 of 2O2O which merely recorded the statement of the police authorities that they did not freeze tlne bank account of the 'grandson' or interfered with the business of the 'grandson' as some sort of restraint against all authorities from taking action against the business of the 'grandson'. Learned counsel for the 'sons' further contended that the 'sons' of late Sri Anand Swaroop Agarwal, being his legal heirs, had formed a partnership and the TSGST authorities had issued a registration certificate to the partnership in the name of \
w 7 |(t M/s. A.P. Products and that there cannot be twc, certificates existing in rcspect of one business and prayed for a direction to the TSGST :ruthorities to cancel the fraudulently obtained registration c()rt1ficate of the grandson'. The learned counsel contended lurthermore that the 'grandson' applied for the registration o:r the same day of death of Sri Anand Su,aroop Agarwal establishing the mala fi.des of the 'grandson'. 1O. The lcarned counsel contended that this Court had suspended th,: TSGST registration certihcate issue in favour of Lhe 'grandson' by order dated 17.07.2020 noticin,q the above facts and circumstances. The learned counsel also sought dismissal of W.P.No. 10830 of 2020 filed by the 'gran,lson'.
Per conrra, Sri Vedula Srinivas, learned Senior Counsel appearing for the 'grandsorr' contended that late Sri Anand Swaroop Agarwal executed the \lVill' bequeath::ng all his properties in lavour of the 'grandson'. Learned SerLior Counsel further contended that the obseruation of the Civil (lourr in the order made irL an interlocutory application with re:gard to the lMiil' being forged cannot be taken note of in vieu. of thc fact that a Civil Miscellaneous Appeal has been preferred against the said order in the interlocutory application. Learned Senior Counsel further contended that the opinion of the Civil Court l
8 was formed on the basis of a photocopy of the Will in the absence of examination/cross-examination of the handwriting expert and cannot be relied upon.
Learned Senior Counsel contended that a valid TSGST registration cerdflcate exists in favour of the 'grandson' which was issued by the TSGST authorities after fuliillment of all the statutory requirements. Learned Senior Counsei further contended that the determination of the genuineness of the Will was in the domain of thc Civil Court and not that of the TSGST authorities and that thc requcst of the 'sons' to cancel the TSGST registration certihcate of the 'graldson' on the basis of the 1Mill' being forged and fabricated, in the absence of any determination by the Civil Court, cannot be countenanced.
Learned Senior Counsel contended that though Section 29 of tLre TSGST Act provides for cancellation of registration by the legal heirs in the case of dcath of the registered person, none of the contingencies existed in the present case, where registration granted in favour of the 'grandson'can be cancelled, more particularly at the instance of the'sons'. Learned Senior Counsel further contended that a separate / different registration certificate could not have been issued by the TSGST authorities in favour of the 'sons' for the same business at the same l )
!I-ffiFrr l:.ffi / ',/ o (q premises and faulted the action of the authorities in issuing the registration certillcate to the 'sons' and the inac tion on the representation of the 'grandson' for cancellation of the same . 14. learned Senior Counsel contended that Lht: 'sons' had suppressed "naterial facts, like their relation with late Sri Anand Srtaroop Agarwal being strained on acr;ount of the 'sons' running parallel business under lhe name of 'Bharatiya Anand G F ood Products' by mrsusing the Tradenrark 'Anand Masala'. The 'sons'also suppressed the fact thal Sri Anand Swaroop Agarv,al had hled and succeeded in C.S.No.129 of 2008 before t he Madras High Court alleging infringement of Trademark 'Anand' by the 'sons' by deceptive [y prefixing 'Bharatiya' and thereby damaging the goodwill. Learned Senior Counsel contended that it was in the light of such i1Jega1 acts on the part of tht:'sons'that Sri Anand Swaroop Agarvral executed the Will' in favour of the 'grandson' bequeathing his properties including the business of A.P. Products'. 1 5. l,earned Senior Counsel sutrmitted that this Court had suspended the TSGST registration certificate of the .sons, by order dated 22.07.2O2O in I.A.No. 1 of 2O2O in W.p. No. 10834 of 2O2O after noticing the above said facts and circumstances. 1 ,i
10
Learned Senior Counsel sought cancellation of the TSGST registration certihcate of the 'sons' and the dismissal of W.P.No.1O47O of 2O2O hled by the 'sons'. 17 . We have perused the pleadings and documents and have also taken note of the respective contentions urged on behalf of the parties.
In the present writ petitions, central to the case is the validity of the Will dated 11. i0.2019. The question whether the Wilf is genuine as claimed by the 'grandson' or is forged as claimed by the 'sons' is sub judice. The genuineness and the validity of the Will dated I 1.10.2019 is contested and has not been conclusively adjudicated. No declaration has been obtained by either party that the Will is forged nor has it been conclusively upheld. All substantive disputes above the genuineness and the validity of the Will, the iawful succession and entitlement of business of late Sri Anand Swaroop Agarwal remain sub judice under Civil Courts,
The proper assignment/ transfer/ registration of TSGST of Sri Anand Swaroop Agarwal in favour of the 'grandson' or the 'sons'is dependent on the outcome of the pending proceedings in the Civil Court, particularly in Suit uide O.S.No.283 of 2O2O ? ) !r
l1 filed by the 'sons' for partition of the propert5r of lar-e Sri Anand Swaroop Agarwal.
This Court is of the considered opinion that the civil disputes and/or conflicting claims like the genuineness and validity of instruments like will, succession etc., should not be adjudicated by the TSGST authorities and that the appropriate juri iction in such matters lies u,ith the Civil Court.
We hav,: noticed that this Court in W.P.No.1Cr47O of 2O2O (fited by the s,rns) by interim order dated 17.O7.2O2O suspended the GST registration certihcate bearirg GSTN 36ACPPY786(ID 1ZR dated O3.OL.2O2O, granted in favour of respondent No.5 therein (grandson) and that respondent No.S therern (grandson) filed I.A.No.2 of 2O2O in W.P. \o. lO47O of 2O2O, for vactrting the interim order. We hereby allornz I.A.No.2 ol 2O2O anrl revoke the suspension of GST registration certificatc bearin g GSTN 36ACPPY 7 866D IZR dated ()
O 1 . 202O.
In W.P.No.1O47O of 2O2O, this Court is of the view that since the partition surt uide O.S.No.283 of 2O2O is pending on the file of the VIII Additional District and Sessions Judge, Ranga Reddy Distric:, petitioner Nos.1 to 3 (plaintiffs in the said Suit) have the right to claim their share in the property including the I 12 business(es) of late Sri Anand Swaroop Agar-wal in the said Suit. Respondent No.4 shall take action in accordance with law in the matter of initiating cancellation proceedings of the GST registration in favour of the 'grandson' in respect of M/ s. A.P. Products, after the determination of the rights of the parties in the said Suit.
We have also noticed that similarly in I.A.No.l ot 2O2O rn W.P.No. 10834 of 2O2O (h1ed by the grandson), this Court passed an interim order suspendrng the GST registration certihcate bearing GSTN 36ABQFA8812MIZU, daLed 28.O3.2O2O of respondent Nos.4, 5 and 6 therein (sons) and that respondent Nos.4, 5 and 6 therein (sons) have frled I.A.No.1 of 2O2l in W.P.No.10834 of 2O2O for vacating the interim order. We hereby allow I.A.No. 1 of 2027 in W.P.No.10834 of 2O2O and revoke the suspension of GSTN 36ABQFA8812MLZU, dated 28.O3.2020. 24. In W.P.No.10834 of 2O2O, this Court is of the view that since the partition Suit uide O.S.No.283 of 2O2O is pending on the hle of the VIII Additional District and Sessions Judge, Ranga Reddy District, the petitioner (arrayed as defendant No.6 in the said Suit) has the right to ciaim his share in the property inciuding the business(es) of late Sri Anand Swaroop Agarwal in a ':.:..
1i the said Sttit. Rcspondent No.3 shall take action in accordance with law in the matter of verification of propriety and legalitv of issuance o1- (iST registration in favour of Lhe ,sons, in respect of M/s. A.P. Pr,rducts after the determination of the rights of the parlies in the s:Lid Suit.
Accordingly, the Writ Petitions are disposed of. There shall bc no order as to costs. Consequently, miscellaneous petitions, if any pending, shall stand closr:d. S -P. PONNA KRISHNA TANT !!clsre**- /i// SECTION OFFICER To, 1 2 3 4 The Principal Secretary Revenue (State Tax) Department, State of Telangana Secretanat. Fyderabad. The Commissioner State Tax (GST), Charminar Drvisior Nampally, Hyderabad. The Deputy State Tax Officer, State Tax (GST) Ladbazar Circle Gaganvihar Complex Narnpally Hyderabad. The Assistant Commissioner of State, Tax (GST) Charrrinar Division Gagan Vihar Nampally. Hyderabao. One CC lo Sri R A Achuthanand Advocate IOPUCI Two CCs to CjP For Revenue ,Hig-h Courtfor the Siate of Telangana. [OUT] Two^CCs to Sri Swaroop O_orilla, Special Government pleader, Figfr iourt ior the State of Telangana. [OUT] Two CD Copi-.s N/ 6 7 IVBC GJP
HIGH COURT S DATED: oztost/o2s -i ,<. 15 c[I ry5 COMMON ORDER WP NOS: 10470 AND 10834 OF 2020 DISPOSING OF THE WRIT PETITIONS WITHOUT COSTS ^1. llb r5 'Jl. a) l i I i I I i I I I I i ! { I I I ! I I I l I I 1 ; I
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.