The High Court · 2025

by the First Respondent to the Second Respondent Bank for recovery of amount from the personal account of the First Petitioner towards alleged dues from the Second Petitioner that too on exempted turnover and without any Assessment Order or Demand being issued as high-handed, arbitrary, capricious, without authority or jurisdiction, contrary to law, amounts to and abuse of the provisions of law, and illegal and consequently set aside the same. lA NO: 1 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 grant stay of operation of the impugned Demand for Payment of Amount Outstanding of a GST Tax by the Dealer from the Rank/Third Party (Garnishee Notice), vide Ref. No DBSG-2/09|BA|2O25, dated 2810712025, issued by the First Respondent to the Second Respondent Bank. Counsel for the Potitioner : SRI G.NARENDRA CHETTY counser ror the Respono""" t[l:HtB?"r?lrT+'-^'f' ' The Court made the following: ORDER THE HON'BLE THE CHIEF JUSTICE SRI APARESH KUMAR SINGH THD HON'BLE SRI JUSTICE G.M.MOMUDDIN AND Writ Petition No.2374O of 2025 ORDER: Heard Mr.G.Narendra Chetty. learned counsel for the peti oners and Mr.Swaroop Oorillzr, learned Special Government Pleader for State Ta-x, for the respondents.

2. Second petitioner is a registered person under the Telangana Goods and Services Tax Act. 2017 {for short 'the TGST Act) with GSTIN:36ACNFS34OJIZO doing business in Pulses and Edible Oils with elfect from 06.03.2021. lts place of business as described in para 4 of the affidavit is as under: "Door No.6-3-456/A/l, Modcl House. Sai Baba Temple Road, Punjagutta, Hyclerabacl. Telangana-500082."

3. According to the second petitioner firm, the first petitioner is its partner. The second petitioner shiftcd its business to House No.5-5-35/248/6/2, Third I.-loor, Mythri Naga-r, Kukatpally, I lydcrabacl * 500072. and strbmitted its l application for amendment of the address online uide Applicalion Reference Number:AA3604240I78935 dated

15.O4.2024. Against that application, a notice was issued by the Deputy State Tax Officer. to which. it could not submit its reply within the stipulated time. as according to it. it did not receive such notice. It has been carryin€{ on business from its new address and tiling retums accordingly. According to the petitioners, a sholv causc notice for cancellation of registration was issued to thc secorld petil.ioner on 26.06.2025 by the Depr-rtv State Tax Officer invoking Rule 21(a) of the Telangana Goods and Services Tax Rules, 2O17. Because its registration was suspended with effect from 26.06.2025, it is not able to carry on its business and file returns. Thereafter. sunlmons were issued to the second petitioner on

31.07.2025 for its appearance in person to give evidence before the Assistant Commissioner (State Ta;r). Hyderabad. on O8.08.2025 with all connected records and books of accounts maintained for the year 2O2O-21 to 2025-26. -)

4. It is at that point of time that the impugned demand for payment of amounts outstanding tor'rrards GST i.e garnishee notice was issued under Section 79(l) of the TGST Act to the second respondent bank to pay the amount of Rs.2,97,88,257 /- submitted their request to the first respondent to lift the Petitioners thereafter attachment of bank account enclosing several documents such as GSTR-1, GSTR 38, GSTR-9, GSTR-9C, copies ol purchase and sale, copies of audited, trading and balance sheet along with trial balance ),ear u,ise and details of exempted inward and outward supplies along u,ith invoices. Due to attachment of bank account of the second petitioner, it is unable to pay the EMIs of vehicle loans, personal loans taken by it from the second respondent. A categorical statement has been made at paragraph 13 of the affidavit that the impugned garnishee notice is illegal, as there is no assessment order passed against the petltroners.

5. According to the petitioners, had an assessment order had been passed, the second petitioner would have a .l right to lilc appeal blr making statutorv deposit of i0%, of the disputed tax and there would be deemed stay of the balance ta-x adjudicated by the Assessiqg Officer Therefore, bcing aggrieved, petitioners havc approached t}-r is Cor-rrt

6. When the matter was taken up on 12.08.2025, taking note of the aloresaid submissions of the petitioners, learned counsel for the State was allowed time to seek instructiorrs. He u,as also asked to produce the records of the assessment proceedings, as certified to be true by the Assessing Officer, on the next date of hearing. An interim protection r.l as also granted. After one more adjournment, toclav, n,hen the matter has been taken up, learned counsel lor the petitioners submits that a show cause notice in Form GSR'I 1 for the financiai year 2023-24 (April, 2O23 to March, 20)41 has been issued by respondent No.l. A copy' thereof has been produced. He submits that since the allegation ol tl-re petitioners is that the impugned garnishee notice has been issued without any assessme nt order, the same may be set aside 5

7. Learned counsel for the State has received the cop,v of the assessment proceeding records as certified to be true B. On perusal thereof, learned counsel for the State has candidl_t, made a categorical statement that no assessment proceedings have been initiated and no order-in-original has been passed before issuance of the garnishee notice dated 28.07.2025 impugned herein. Respondent No. I Officer has also appeared on his own toda,v. It is stated by ['rim that such a mistake occurred due to miscommunication u,ith the stall ol his officc.

9. 'l'he plea of mistake cannot be accepted. It is the re sponsibility of the proper officer i.e. respondent No.1 to unclertake assessment proceedings and thereafter, if the tax dues remained unpaid, initiate garnishee proceedings. lt is the proper officer who is responsible to upload these' documents, such as order-in-original or garnishee notice it'r GST portal, u,hich responsibility he has completely failed tr.r ob serve . I ()

10. Such an irresponsible act on the part ol respondent No.l has entailed in freezing of the bank account of the petitioners till it has been revoked by an email sent on

26.08.2025 b-r' respondent No. 1, apparently realising his fault. Let it be made clear that at no point of time, it is the purport of the present proceeding to prevent any lawful action as against the petitioners for non-compliance or violation of an-v provisions of the TGST Act. However, issuance of a garnishee notice, which is a mode of recovery under Sectior-r 79(ll of the TGST Act, rvithout even adjudication of an order, is wholly unacceptable. Therefore, the impugned garnishee notice dated 2a.O7.2025 (Annexure P1) is set aside. 1 1. We lt:ave it open to the respondents to t:rl<e any steps lor non-compliance or violation of the provisions of the TGST Act, er-" is permissible in law. Hou,ever, u,hile parting, u'e direct thc Commissioner (State Tax) to takr: appropriate action against the concerned officer - respondent No.1 1n accordance u ith las'. {6 / 1

12. T[re instalt Writ Petition is accordingly disposed of. l'here shall be no order as to costs. Misccllaneous applications pending, if any, shall stancl closed. ,TRUE COPY' A D/. A. JAYASRE ANT REGIS c ON OFFICER \ To, 1 . The Commissioner, CT Dept, CT Complex, Nampally, Hyderabad. 2. The Assistant Commissioner (ST), Khairatabad-Somajiguda-2 Circle, Punjagutta Division, fVlayur Kushal Complex, 8th Floor, B Block, Beside Chermas, Abids, Hyderabad - 500001, Telangana.

3. The Manager, HDFC Bank, '1 l-165, [\,4.s. l\4ansion Subash Road, Beside lvleda Petrol Bunk, Ananthapur, Ananthapur District, Andhra Pradesh - 515001

4. The Principal Secretary to the Government, Revenue (CT) Department, State of Telangana, Dr. B.R. Ambedkar Telangana Secretariat Building, Hyderabad, Telangana.

5. One CC to SRI G.NARENDRA CHETTY, Advocate. IOPUCI 6. One CC to SRI SWAROOP OORILLA, SPL.G.P for State Tax. IOPUC] 7. Two CD Copies. BSK MMT w HIGH COURT DATED:2810812025 t. J r3 0 0[r ?02t L ('r':,,^.-..,-. ORDER WP.No.23740 o12025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS q .t