Sri Bhagavathi Granites Industries vs. The Superintendent Of Central Tax
Original PDF →Facts
The petitioner, Sri Bhagavathi Granites Industries, filed a writ petition challenging a Form DRC-13 dated 12-08-2024 issued by the Assistant Commissioner (Respondent No. 2) to Allahabad Bank (Respondent No. 4), attaching the petitioner's bank accounts. The attachment was based on an Order-in-Original dated 06.01.2022. The petitioner argued that the bank attachment was illegal because a mandatory Form DRC-07 was not issued before the Order-in-Original, and it was only issued on 24.09.2024. The petitioner did not challenge the Order-in-Original itself. The respondents contended that DRC-07 was uploaded on 27.06.2023.
Held
The Court dismissed the writ petition. It held that even if an order is void, it must be challenged before a competent forum and cannot be ignored by the affected party. The Court relied on Supreme Court judgments in Robust Hotels (P) Ltd. v. EIH Ltd., Krishnadevi Malchand Kamathia v. Bombay Environmental Action Group, State of Kerala v. M.K.Kunhikannan Nambiar Manjeri Manikoth, and Shiv Chander Kapoor v. Amar Bose, which established that an order, even if void, remains effective unless set aside by a court of competent jurisdiction. The Court noted that the petitioner had not challenged the Order-in-Original dated 06.01.2022, nor had they filed an appeal within the stipulated time. Furthermore, the writ petition was filed significantly after the Order-in-Original was passed. The Court also noted the respondents' submission that DRC-07 was uploaded on 27.06.2023. Therefore, no case was made out for interference.
Key Issues
1. Whether the bank attachment, founded upon an Order-in-Original, is liable to be interfered with if the mandatory Form DRC-07 was not issued prior to the Order-in-Original, as per Section 73 of the CGST Act, 2017? The petitioner argued that the issuance of Form DRC-07 before passing the Order-in-Original was mandatory. They contended that since DRC-07 was issued only after the Order-in-Original, the subsequent bank attachment was illegal and void, and therefore, did not require a separate challenge to the Order-in-Original itself. The respondents argued that Form DRC-07 was actually uploaded on 27.06.2023, prior to the Order-in-Original. They further contended that even if an order is void, it must be challenged before a competent forum and cannot be ignored by the affected party. They relied on Supreme Court judgments to support this contention.
Sections Cited
Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the following: ORDER
THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL AND THE HON'BLE SMT. JUSTICE RENUKA YARA WRIT PETITION No.25839 of 2o24 ORDER: (Per the Hon'ble tle Acting Chief Justice Sujog Paul) Sri M.Naga Deepak, learned counsel for the petitioner and Ms. Pravalika, learned counsel representing Sri Dominic Fernaldes, learned Senior Standing Counsel for CBIC, appearing .for respondent Nos. I to 3. 2. The petitioner suffered an Order-in-Original on 06.01.2022' This writ petition is hled on I8.O9.2024. 3. The petitioner, admittedly, did not prefer any appeal against the Order in-Original dated O6.01.2022. The singular argument advanced by iearned counsel for the petitioner is that providing the DRC-07 before passing the Order-in-Original was mandatory and the same was issued only on 24.09.2024. Thus, even if Order-in-Original is not called in question, the bank attachment founded upon a defective Order-in-Original without furnishing DRC-07 is liable to be interfered with ' 4 . Ms. Pravalika, learned counsel representing' Sri Dominic Fernandes, learned Senior Standing Counsel for CBIC, opposed I i
2 the prayer on the basis of memo filed by respondent Nos.1 to 3 arrd urged thal the DRC-07 was actually uploaded on 27.06.2023. A photo copy of ;-elevant portal relating to GST DRC-07 is filed for ready releren cr:.
The grier,,iltce relating to the bank attachment has direct nexus with the ()rder-in-Original. In other words, it is the Order- in-Original vrhir:h became the reason for the bank a ttachment Despite repeaterl query, learned counsel for the petitior:er has not shown any interest to assail the Order in-Original. The contention of the learned counsei for the petitioner is that since DRC-07 has not been issued before passing the Order-in-Original, -.here is no need to challenge the Order-in-Original. For three reas(,ns, we are not able to persuade ourselves with this line of argume nt. Firstly, as per the stanC taken by respondent Nos.1 to 3, DIIC-07 was indeed brought ,rn portal on 27.06.2023 and secondlv. if an order (Order-in-Original) is bad in law, the litigant cannot assrlme that it is bad in lavr,. Even a void order needs to be cha llenged in appropriate proct:edings. The Supreme Court has laid down the curtains on thrs aspect in Robust Hotels (pl Ltd. v. EIH Ltd.r, ' lzorzy r scc oz:
:gta 3 Krishnadevi Malchand Kamathia v. Bombay Environmental Action Group2, State of Kerala v. M.K.Kunhikannan Nambiar Manjeri Manikoths and Shiv Chander Kapoor v. Amar Bosea' 6 In Robust Hotels (Pl Ltd. (supra), it was held as under:
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Tlnis Court further held that it is not open either to a party to the lis or to any third parw to determine at their own that an order passed bv a court is valid or void. A parW to the lis or the third partv who considers an order passed bv a court as voidable or non est, must approach the court of comPetent uri iction to have the said order set aside on such unds as may be available in law..." (Emphasis Supplie d)
In Krishnadevi Malchand Kamathia (supra), it was held as under:
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It is void, it re a settled 1egal proP ouires to be so decla osi[ion that red bv a com even if an order is petent forum and 1t is not permissible for anl/ person to ignore the same merelv because in his op void. ln State of Kerala v. M.K. Kunhikannan Nambiar ManjeiMani kothl,laduuil Gupta v . Deui SoruP f(2OOg) 6 SCC 1941, this Court held that whether an order is valid or void, cannot be determined bv the [(1996) 1 SCC 435], Tayabbhai M. Bagasaru;allav' Hind Rubber Industries (P) Ltd. l(1997) 3 SCC 4431, M' Meenakshi v. Metadin Aganual t(2OO6) 7 SCC 47Ol and Sneh inion the order is es. For setting aside such an order, even if void, the has to approach the appropriate forum lT. h State of Punjab v. Gurdeu Singh[(t9911 4 SCC 1] this Court held that a partv assrieved bv the invalidiw of an order h the court for relief of declaration that the has to aoDroac order asainst him is lnoperative and therefore, not binding upon him. While deciding the said case, this Court Placed ' (zo r t) : scc :o: 'lreeoy t scc a:s o (rggo) t scc zr+
) 4 reliance upolr the judgment in Smith v. Ensf Elloe RDC [1956 AC 736: (1956) 2 WLR 888 : (1956) i All trR 8551 , ,vherern Lord Radclilfe observed : (AC pp. 769-70) "An or<lt:r, even if not made in good faith. is still an a ble of iesai consequences. It bears no brand ACt CA ditv' [on] its forehead. Unless the nccessi !ry ngs are taken at law to estzrblish the car.lse operate erqc omnes i.e. for and against e,/eryone luch a declaration is permissible tf thr: court ) conclusion that the author of the order lacks iction/ competence and therelore, it cc,mes to ,n that the order suffers from patent an( latent
Thus. from the above it emerg of rnvali procerxli of invaliditv and to set it quashed or otherw ise upset- it will remain as effective for its ostensiltle purposq as the most impeccable of orders." 1.8.ln Sultan Sadikv. Sanjag Raj Subba[(2OO ) 2 SC(] 3771, this Court took a similar view observing that once an ,:rrder is declared norr est bv the court only then the iudgrnent of qqllity would concerned. S comes to lhr inherent juri the conclusic invalidity. es that cven if the order notili(' by the same cartnot decide that the said order / notification rs not binding upon it. It has to approach the court for seekirq such declaration 'lhe order may be hypothetically a null ty and even if its invalidity is challenged before the courl in ;l given circumstar:ce, the court may refuse to quash thc szrme on various grcuLrrds including lhe standing of the petitiur)e r or on the ground ,t-'delay or on the doctrine o[ waiver or an.,- other legal reason. Ihe order may be void for one purpose or for one person, it rnay not be so for another purpose or another person. 8 In M.K.Kunhikannan Nambiar Manjeri Manikoth (supra), it was held as Lrnder
It is not necessary for us to go into the merits of thr: case. We are of the view that the order passed inter partes n CRp No. 344O of 1977 dated 2-11-tg77, has becomi final, and it zLtion is void /voidable. the oartv assrieved
5 concludes the matter. The observations made in the proceedings, at the instance of the first respondent regarding the validity of the order of the Board, in CRp No. 3696 of 1977 , will not, in any way, affect the legality and validity of the proceedings declining to implead Respondents 3 and 4 or the order passed in revision therefrom - CRp No. 3440 of l97T.lt is true that the proceedings dated 2a-6-1gZZ were observed to be void in law in CRP No. 3696 of I97Z, fited, by the first respondent. In our opln10n, even a void order or decision rendered between parties cannot be said to be non-existent in aIl cases and in all situations. Ordinarilv. such an order will. in fact, be effective inter partes until it is successfullv avoided or challensed in a hisher forum. Mere use of the word toid' is relative rather than an absolute meaning. It only conveys the idea that the order is invalid or illegal. It can be avoided. There are degrees of invalidity depending upon the gravity of the inhrmit5r, as to whether it is, fundamental or otherwise and in this case, thc only complaint about the initiation of the suo motu proceedings by the Board was, that it was not initiated on intimation by the State Land Board about the non-frling of the statement as required by Section 85(7) of the Kerala Land Reforms Act. In our opinion, this is not a case where the infirmity is fundamental. It is unnecessary to consider the matter further. not determinative of its lesaI impact. The word 'void' has a 8. Ln Halsbury's Lanas of England, 4th trdn., (Re-issue) Vol 1(1) in para 26, p. 31, it is stated, thus: "If an act or decision, or an order or other instrument is invalid, it should, in principle, be null and void for all purposes; and it has been said that therc are no degrees of nullity Even thoush such an act is wrong and lackins in iuri iction, however, it subsists and remains fuily effective unless and until it is set aside bvacourt of comoetent uri iction. Untii its validitv is challensed. its leeality is preserved." ln the Judicial Reuieut of Administrotiue Action, De Smith, Woolf and Jowell, 1995 Edn., at pp. 259-6O the law is stated thus: "The erosion of the distinction between juri ictional errors and non-juri ictional errors has, as we have seen, correspondingly eroded the distinction between void and voidable decisions. The courts have become increasingly impalient with the distinction, to the 6 extenl: ,.hat the situation today can be summarise,l as follorvs Al1 official decisions are presumed to be valid r.ntil set asirle or otherwise held to be invalid b 1 y a cou;t of compete nt iuri iq:tion." Similarly, S.'ade and Forsyth in Administratiue LaLt, lieventh trdn., 1994, have stated the law thus at pp.34l 342: every unlawful administrative act, houn.:ver invalirl, is merely voidable. But this is no more t'ran the tru ism that in most situations the only u'a.],. to resist lrnlawful action is by recourse to Lhe lavr,. n a well-known passage l,ord Radcliffe said: An order, even if not made in good faith, is still an act capabk of leqal consequences. It bears no branrl of invalidit'r upon its forehead. Unless thc neces:.,4ry procetllir-rqs are taken at law to establish Jhe cause of invali<lir rvill rc'nrain as effective for its ostensible purpos( [. lI AS thc rnrrst impeccable of orders.' This rnust be equally true even where the brzrn< I of invalidir-v is plainly visible: for there also the or der can effectivelv be resisted in law onl b obtainins the decision of the court. The necessity of recourse to thc court hrts been pointed out repeatedly in the Horrs: of Lords arLd Priry Council withont distinction be tr,r,:en patent i urd latent defects." The above statement of the law supports our view order of tltt: Board dated 28-6-1977, declining to Respondent:, 3 and 4 (which stood confirmcd in concludcs I.Li€ matter against Respondents 3 and 4." llrat the irnplead r,:vision) 9 (Emphas is Supplied) In Shiv Chander Kapoor (supra), the Supreme lourt held as under '23. ln Wadr: s Administratiue Laut, 6th edn. at pp. lr51-53, there is an I luminating discussion of this topic. It ha s been pointed out that toid' is meaningless in an absolute sense; n at law to and hnless 1he necessary proceedings are take
7 establish the cause of invaliditv and to set it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders'. In the words of Lord Diplock, "the order would be presumed to be valid unless the presumption was rebutted in competent lesal proceedings by a party entitled to sue" lBd.: Hoffman-La Roche v. Secy. of State for Trade and Industry, 1975 AC 2951" (trmphasis SupPlied)
In absence of challenging the Order in-Original, no case is made out for interference. We decline interference for yet another reason. The Order-in-Original was issued on 06.01.2022. No 'appeal was preferred. The writ petition is also not filed within the stipulated time limit prescribed for preferring the appeal. The Supreme Court in Assistant Commissioner (CT) LTU, Kakinada v. Glaxo Smith Kline Consumer Health Care Ltds has opined as under:
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We may now revert to the Full Bench decision of the Andhra Pradesh High Court in Electronics Corporation of India Ltd.(supra), which had adopted the view taken by the Full Bench of the Gujarat High Court in Panoli Intermediate (India) Pvt. Ltd.vs. Union of India & Ors.19 and aiso of the Karnataka I' I 8 eriod of of writ Kar. on Lssed in imits of rules of where such a qround hat bc titioner xlmum I of the . period ition of in the e.Iudge oration (Emphasis Su pplied)
For these crlmulative reasons, admission is dectined and the writ petition is dismissed. No order as to costs. Miscellaneo -rs petitions pending, if any, shall star.r d closed 't //II N. SRIHARI EPUTY REGISTRAR To SECT{ON OFFICER
The Supe Secundra bad Commissionerate rintendent of Central Tax Kapra Range, Uppal Division,
The Assistant Commissioner, Uppal CGST Division, Uppat CGST Commissionerale Secundrabad The Commissioner of Central Tax, Secundrabad Commissionertrte The Manager, Allahabad Bank presently lndain Bank) 376_435 Main Road, Himaya t Nagar, Hyderabad One CCtoSRl M NAGA DEEPAK , Advocate [oPU One CC to SRt t) loPUCl Two CD Copies 3 4 5 b. i 7 PSK. LS @- OMINIC FERNANDES, senior stacl nding counsel for CBIC
HIGH COURT DATED:0910412025 ORDER WP.No.25839 of 2024 ffi?,F.+\' ,)i". 7 i.) U (' 20AIn mn 'i 'ri . /-, -- ".i.:.-'.'.'- ,.;/ - -- ----)' DISMISSING THE WRIT PETITION wrTHopT cosTs i/ .r \ i-" a\ 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.