M/S. Vagdevi Technocrats vs. The Additional Commissioner (St)(Appeals)
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M/s. Vagdevi Technocrats (the petitioner) is engaged in works contract services related to manufacturing, repairs, and maintenance of ships. The petitioner registered under CGST, APGST, and IGST Acts. The Assistant Commissioner (ST) issued a show cause notice on 29.01.2024, proposing a demand of Rs. 15,14,010/-. Following the petitioner's reply, a demand order was passed on 08.04.2024, confirming the demand, interest, and penalty. The petitioner appealed to the Additional Commissioner (ST)(Appeals), who, by an order dated 30.08.2024, partly allowed the appeal by reducing the penalty by 90% but affirmed the demand of tax and interest. Subsequently, the Deputy Assistant Commissioner of State Tax attached the petitioner's bank account on 11.03.2025 for recovery. The petitioner filed a writ petition challenging these actions.
Held
The Court disposed of the Writ Petition by directing the petitioner to file a representation detailing the facts of tax paid under the wrong head. The 1st Respondent (Additional Commissioner (ST)(Appeals)) is directed to consider this representation and carry out necessary adjustments of tax, if it is found that payments were wrongly categorized under IGST, within three weeks of receiving the order. The Court also noted that it is open for the petitioner to avail of the amnesty scheme by making appropriate applications, which shall be dealt with in accordance with the law. The Court did not explicitly rule on the validity of the circular or the justification for the bank account attachment, but the direction for tax adjustment implicitly addresses the petitioner's primary grievance regarding misallocated tax payments. The Court followed a previous order in W.P.No.2886 of 2005 in similar circumstances.
Key Issues
1. Whether the petitioner can seek adjustment of tax paid under the wrong head (IGST) against the tax payable under the correct head (CGST and SGST), and if so, what is the procedure? - Petitioner's argument: The petitioner contends that certain tax amounts were paid inadvertently under IGST and should be adjusted against CGST and SGST liabilities. They rely on the judgment in Saji S. Vs Commissioner of State GST (2018) for this adjustment. - Revenue's argument: Not recorded. 2. Whether paragraph 3.2 of Circular No. 162/18/2021-GST, which mandates payment of tax under the correct head before claiming a refund for tax paid under the wrong head, is ultra vires to Section 19 of the IGST Act, 2017? - Petitioner's argument: The petitioner argues that this clarification in the circular is beyond the scope of Section 19 of the IGST Act. - Revenue's argument: Not recorded. 3. Whether the attachment of the petitioner's bank account by the 3rd Respondent is justified, and if not, whether it should be lifted? - Petitioner's argument: The petitioner seeks to lift the attachment of their bank account, implying it is an unjustified recovery action given their dispute over tax adjustment and the pending appeal/writ proceedings. - Revenue's argument: Not recorded.
Sections Cited
Section 50, Section 73, Section 19
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Cause title — parties, addresses and appearances
or order S ♦ aggrieved in the case. B. Consequently, the Hon’ble Court may be pleased to issue a writ of mandamus or any other writ, direction. Respondent to adjust the amount of GST paid under the or order directing the 2nd wrong head i.e. IGST of Rs. 14,75,910/- against the amount of tax payable under the head i.e.. correct CGST Rs.7,37,955/-, SGST Rs.7,37,955/-, C. The Hon’ble Court may be pleased to issue a writ of Mandamus or any other writ, direction or order holding that para 3.2 of Circular No. 162/18/2021-GST dated 25.09.2021, clarifying that the refund claim paid under the wrong head, can be filed by the taxpayer only after payment of the tax under the correct head first, as being ultra vires to the provisions of section 19 of the IGST Act, 2017 to the extent of the above-mentioned clarification. of tax D. Consequently, the Hon’ble Court may be pleased to issue a writ of mandamus or any other writ, direction, or order to set aside the actions of the 3rd Respondent in attaching the Bank A/c of the Petitioner in State Bank of India vide DRC-13 dated 11.03.2025 and direct the 6*^ Respondent the attachment of the Petitioners Bank Account. to lift
0^ lA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the writ petition, the High Court be pleased to stay the operation of the proceedings of the 1st Respondent in Order in Appeal passed vide Order No. ZD370824025788T dated 30.08.2024 (Annexure P-1) in the interest of justice. may lA NO: 2 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondent, to lift the Attachment of the Petitioner’s Bank Account in the State Bank of India, MVP Colony vide DRC-13 dated 11.03.2025 and drop the recovery proceedings initiated in the interest of justice. Counsel for the Petitioner : SRI ANIL KUMAR BEZAWADA Counsel for the Respondent Nos.1 to 3 : GP FOR COMMERCIAL TAX Counsel for the Respondent No.4 : GP FOR REVENUE Counsel for the Respondent No.5 : SRI P. PONNA RAO, DEPUTY SOLICITOR GENERAL OF INDIA Counsel for the Respondent No.6 : NONE APPEARED The Court made the following: ORDER
1 APHC010135032025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Juri iction) WEDNE AY ,THE TWENTY SIXTH DAY OF MARCH TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE DR JUSTICE K MANMADHA RAO WRIT PETITION NO: 7048/2025 [3525] Between: M/s. Vagdevi Technocrats, ...PETITIONER AND The Additional Commissioner Stappeals and Others Counsel for the Petitioner: 1.ANIL KUMAR BEZAWADA Counsel for the Respondent(S): 1.GP FOR REVENUE 2.GP FOR COMMERCIAL TAX This Court made the following order: (per Hon’ble Sri Justice R. Raghunandan Rao) The petitioner which carries out Works Contract Service ...RESPONDENT(S) relating to manufacturing of ships, repairs and maintenance services in relation to ships through the Ship Building Centre (Ministry of Defence) had registered itself under the COST, APGST and IGST Acts. The petitioner had been issued a show cause notice, by the 2^^^ respondent, on 29.01.2024, calling upon the petitioner proposing to raise a demand of Rs.15,14,010/-. The 2"'^ respondent
2 after considering the reply of the petitioner had passed demand order, dated 08.04.2024, confirming the aforesaid payment and also levied interest and penalty. The petitioner aggrieved by the said order had filed an appeal before the 1®* respondent on 06.07.2024. The 1®* respondent by the order, dated 30.08.2024, had partly allowed the appeal by dropping penalty to the extent of 90% and affirmed the order to the extent of demand of tax under the COST, SGST and IGST along with interest under Section 50 and penalty under Section 73 of the CGST Act. Thereafter, the 3'^'^ respondent is said to have attached the bank account of the petitioner on 11.03.2025, for recovery of the demanded amount.
The petitioner being aggrieved by these actions, has approached this Court, by way of the present Writ Petition. A perusal of the Writ affidavit filed in support of the Writ Petition would show that the petitioner is not essentially disputing the tax payable by him. The contention of the petitioner is two fold. Firstly, he contends that certain amounts of tax had been paid inadvertently under the head of IGST though the said payments shoutd be credited under CGST. He would submit that the CGST tax demanded against him should be adjusted against the payment made by the petitioner under the head of IGST. Learned counsel for the petitioner would also contend that certain tax amounts have been demanded apart from penalty on the ground that there is discrepancy between 2A Form Vs GSTR-3B and that the petitioner be permitted to obtain benefits under the amnesty scheme. 3. 4. 5. 3
In similar circumstances, this Court by an order, dated 12.12.2025, in W.P.No.2886 of 2005 had passed certain directions in relation to the adjustment of taxes.
Following the same, the present Writ Petition is disposed of with the following manner; a) The petitioner is at liberty to file a representation setting out these facts. Upon such representation being filed, the I^Vespsondent is directed to consider the same and carry out necessary adjustments of tax, if it is found that they have been wrongly categorized under the IGST payment, within a period of three weeks from the date of the receipt of this order, b) It is open to the petitioner to avail of the amnesty scheme by making appropriate applications which shall be dealt with in accordance with law. There shall be no order as to costs. As a sequel, miscellaneous petitions, pending if any, shall stand closed. 7- SHAIK MOHD. RAFI ASSISTANT REGISTRAR //// ICER SECTI To,
The Additional Commissioner (ST)(Appeals), D.No. 40-5-19/9b, Back Of NVKR Towers, Mogalrajpuram, Vijayawada, Andhra Pradesh - 520010
The Assistant Commissioner (ST), Siripuram circle, Visakhapatnam-I Division, D-no. 8-1-63/10, Plot no. 15, Meher plaza, Nauka nagar, Upstairs satyam super market, Peddawaltair, Visakhapatnam-530017 .
The Deputy Assistant Commissioner of State Tax, Siripuram Circle, D- no. 8-1-63/10, Plot no. 15, Meher plaza, Nauka nagar. Upstairs satyam super market, Peddawaltair, Visakhapatnam-530017. 4. The Principal Secretary Revenue Department, State of Andhra Pradesh, A.P. Secretariat, Velagapudi, Amaravati, Guntur District.
The Secretary (Revenue), Union of India, Department of Revenue, North Block, New Delhi.
The Manager, State Bank of India MVP Colony, Visakhapatnam.
One CC to Sri Anil Kumar Bezawada, Advocate [OPUC]
Two CCs to GP for Commercial Tax, High Court of Andhra Pradesh. [OUT]
Two CCs to GP for Revenue, High Court of Andhra Pradesh. [OUT] lO.One CC to Sri P. Ponna Rao, Deputy Solicitor General of India (OPUC) 11 .Three C.D. Copies. Cnr f i.
r HIGH COURT DATED:26/03/2025 ORDER WP.No.7048 Of 2025 DISPOSING OF THE W.P. WITHOUT COSTS
Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.