Introduction

The petitioner, M/s. Sri Sai Krishna Enterprises, challenged an Order-in-Original passed under Sections 73, 50 and 122 of the CGST Act, 2017, whereby the department confirmed a demand of ₹3,09,084, comprising alleged short payment of tax, interest and penalty. The dispute primarily arose from two allegations: (i) short payment of tax of ₹2,67,300 due to mismatch between GSTR-3B and GSTR-1 for the period July 2017 to March 2018, and (ii) excess availment of Input Tax Credit (ITC) amounting to ₹41,784 based on mismatch between GSTR-3B and GSTR-2A. The petitioner contended that the alleged short-paid tax of ₹2,67,300 had already been deposited on 30.07.2018, well before issuance of the Show Cause Notice dated 25.09.2023, and produced a payment receipt evidencing such payment. However, due to alleged non-service of proper notice, the petitioner could not participate in the adjudication proceedings, resulting in an ex parte order dated 26.12.2023. Subsequently, recovery proceedings were initiated through Form GST DRC-13, including attachment of the petitioner’s bank account. Although the petitioner submitted a representation requesting withdrawal of the demand and lifting of the bank attachment, the department did not act upon it, compelling the petitioner to approach the Telangana High Court.

Issues Before the Court

The High Court considered the following issues: