Kabra Tyre Marketing vs. The State Tax Officer (State Tax)

Facts

The petitioner, Kabra Tyre Marketing, represented by its proprietor Sri Kamal Kabra, filed a writ petition challenging an order dated August 20, 2024, passed by the State Tax Officer, Mehdipatnam-1 Circle. This order demanded a tax of Rs. 1,53,00,860/- (CGST Rs. 76,50,430/- and SGST Rs. 76,50,430/-) along with interest for the financial year 2019-20. The petitioner contended that the order was passed without following the due procedure under Section 65 read with Section 73 of the TGST and CGST Act, 2017, and was beyond the time prescribed under Section 73(10) of the said Acts. The challenge also extended to Notification No. 56/2023 dated December 28, 2023, issued by the CBIC and adopted by the Government of Telangana via G.O.MS No. 170 dated December 30, 2023, which extended limitation periods under Section 168A of the CGST Act, 2017. The petitioner argued this extension was illegal, ultra vires, irrational, arbitrary, unreasonable, and violated principles of natural justice and constitutional provisions.

Held

The Court noted that the petitioner's counsel submitted that this matter was similar to another writ petition, W.P. No. 2123 of 2024, which was disposed of by the Court in similar terms. The respondents had no objection to this approach. Consequently, the Court disposed of the writ petition by reserving liberty to the petitioner to avail the remedy of statutory appeal before the appellate authority. The Court directed that the appellate authority shall consider and decide the appeal on merits, without being influenced by the ground of limitation. It was clarified that the appellate authority shall not express any opinion on the merits of the case and that the order would not be thrown overboard on the ground of limitation. The Court explicitly stated that it had not expressed any opinion on the merits of the case. No order as to costs was made. The interlocutory applications, if any, were also disposed of.

Key Issues

1. Whether the order passed by the State Tax Officer demanding tax and interest for the financial year 2019-20, under Section 73 of the TGST and CGST Act, 2017, was passed without following the due procedure contemplated under Section 65 read with Section 73 of the said Acts and was barred by limitation under Section 73(10) of the CGST Act, 2017? 2. Whether Notification No. 56/2023 dated December 28, 2023, issued by the CBIC and adopted by the Government of Telangana vide G.O.MS No. 170 dated December 30, 2023, extending the limitation period under Section 168A of the CGST Act, 2017, is illegal, ultra vires, irrational, arbitrary, unreasonable, and violative of the principles of natural justice and Articles 14, 19, and 265 of the Constitution of India? Petitioner's Arguments: The petitioner argued that the order was procedurally flawed, not following the prescribed procedure under Section 65 read with Section 73 of the TGST and CGST Act, 2017. They further contended that the demand was time-barred as per Section 73(10) of the CGST Act, 2017. The petitioner also challenged the validity of the notification and the consequential Government Order extending limitation periods, asserting they were beyond the scope of Section 168A of the CGST Act, 2017, and violated fundamental constitutional rights and principles of natural justice. Respondents' Arguments: The judgment does not record specific arguments from the respondents. However, the presence of the Special Government Pleader for State Tax indicates their representation and likely defense of the impugned order and notification.