ORDER
1. Heard Mr. V.Veeresham, learned counsel appearing for the petitioner and Mr. Swaroop Oorilla, learned Special Government Pleader for State Tax appearing for the respondents.
2. The impugned order-in-original dated 02.09.2024 pertaining to the tax period April, 2019 – March, 2020 passed under Section 73 of the Telangana Goods and Services Tax Act, 2017 (hereinafter referred to as ‘the Act’) is under challenge primarily on the ground that it is barred by limitation having been passed beyond the cut-off date i.e., 31.08.2024 for passing orders in respect of the proceedings for tax period 2019-20. Petitioner approached the appellate authority also, but by impugned order dated 23.02.2026 in Form GST APL-02, the same was dismissed. Both the orders are under challenge. The impugned order was passed on the basis of best judgment assessment as petitioner had not responded to the show cause notice and file any reply.
3. Pursuant to the time granted on 21.04.2026, the respondents have filed a counter affidavit. Learned Special Government Pleader for State Tax has referred to the contents thereof, particularly paragraph Nos.6 and 7, which are specifically on the issue of uploading of the order beyond 31.08.2024 i.e., the period of limitation. Paragraph Nos.6 and 7 are extracted hereunder:
“6. It is respectfully submitted that for Financial Year 2019-20 the time limit for passing orders under Section 73 stood extended up to 31.08.2024. At the relevant time, Shri Chisteshwar Polispatlola was functioning in his regular post as Assistant Commissioner, Rajendranagar-1 Circle and simultaneously holding Full Additional Charge (FAC) of Vanasthalipuram-1 Circle, as per order dated 18.05.2024 issued by Joint Commissioner. Accordingly, all pending orders of both circles had to be consecutively processed and uploaded using the same digital authentication before midnight of 31.08.2024. As per the administrative compilation for August 2024, Rajendranagar-1 Circle reflected 336 orders and Vanasthalipuram-1 Circle reflected 158 order entries, totalling 494; between 21.08.2024 and 31.08.2024 alone the corresponding figures were 264 and 123, totalling 387; and on 31.08.2024 itself 36 and 29 orders respectively were passed till the last hour. The petitioner’s DRC-07 was processed/uploaded within the said time-bound window.
7. Further, it is submitted that by the time of orders were made ready and uploaded in respect of 36 orders pertaining to R-I circle and 29 orders pertaining to Vanasthalipuram-I circle if was 11:59 P.M of 31.08.2024. however, the order in respect of petitioner could not be uploaded due to change of day from Saturday to Sunday. Further the Sunday being the public holiday the order pertaining to petitioner could not be uploaded on 01.09.2024 and as such on the immediate next working day i.e., on Monday i.e., 02.09.2024 the order of the petitioners were uploaded in the GST common Web Portal. The non uploading of order of the petition on or before 31.08.2024 is neither willful nor wanton but for the above stated reason.”‘
4. The counter affidavit further states that the show cause notice quantified the discrepancies noticed in GSTR-09, GSTR-3B and connected records calling upon the petitioner to file objections in DRC-06 within the prescribed time. However, an ex parte order was passed since petitioner did not file written objections nor availed personal hearing despite three reminders/personal hearing opportunities issued through the common portal. The impugned ex parte order was passed for the Financial Year 2019-20 as the limitation was for passing the order was expiring on 31.08.2024. The Proper Officer of Vanasthalipuram-I Circle had to pass the order on the basis of the material then available on record. The impugned proceedings were either without jurisdiction or authority of law. According to the respondents, the substantive order was completed, but the later date reflected in the portal reference/RFN is only the date of system generation/availability after submission and not the date on which the adjudicating mind was exercised. The Proper Officer was using a single DSC/digital key linked to his login and had to process and upload a large number of time-bound orders for Rajendranagar-I Circle and Vanasthalipuram-I Circle on 31.08.2024 up to the last hour. Petitioner has not shown as to how it is prejudiced with the present impugned order being passed on 02.09.2024 instead of 31.08.2024 although the time limit for passing orders for the Assessment Year 2019-20 was extended up to 31.08.2024. Learned Special Government Pleader for State Tax, thereafter, referred to the statement made at paragraph Nos.61 to 63 of the counter affidavit, which are extracted hereunder:
“61. It is further submitted that a subsequent explanation dated 25.07.2025, now relied upon by the petitioner, states that the differential IGST ITC of Rs.1,94,25,928/- represented import IGST paid on imported capital goods/machinery and that the same was not reflected in Table 8A/GSTR-2A. The said explanation further states that the ITC treated as ineligible related mainly to inward supplies such as works contract / electrical goods / plywood / hardware and allied items used for installation of the imported machinery. Thus, according to the later explanation, the core difference is import IGST ITC and installation-related ITC, and not fictitious credit.
62. It is submitted that the petitioner filed the above reply and supporting documents within time in response to the show cause notice, the demand would have been examined on merits in the light of such documents and, on verification, would not have been confirmed in the present form and would in all probability have been dropped in whole or in substantial part on the major issues. The substantial difference, therefore, arose because of non-filing of reply by the taxpayer and not because the adjudicating authority had before it the later documents and still chose to reject them.
63. It is submitted that the answering respondent respectfully submits that, prima facie and subject to verification of the subsequently produced bills of entry and supporting invoices, on the major issue there is no revenue loss, since the petitioner now claims that the tax component was import IGST already paid through bills of entry and that the major inward supplies treated as ineligible were used for installation of the imported capital goods.”
5. It appears from a perusal thereof that on the basis of the subsequent explanation furnished on 25.07.2025, the differential IGST ITC of Rs.1,94,25,’928/- represented import IGST paid on imported capital goods/machinery and that the same was not reflected in Table 8A/GSTR-2A. The said explanation further states that the ITC was treated as ineligible related mainly to inward supplies such as works contract/electrical goods/plywood/hardware and allied items used for installation of the imported machinery. According to the later explanation, the core difference is import IGST ITC and installation-related ITC and not fictitious credit. The respondents in the above paragraphs have further submitted that prima facie and subject to verification of the subsequently produced bills of entry and supporting invoices, on the major issue there is no revenue loss since the petitioner now claims that the tax component was import IGST already paid through bills of entry and that the major inward supplies treated as ineligible were used for installation of the imported capital goods. Learned Special Government Pleader for the State Tax at the end submits that even though the order has been uploaded on 02.09.2024 after expiry of the period of limitation but in view of the explanation furnished by the petitioner, the Department has found that there is no revenue loss on the major issue. However, he has not been able to justify as to how an order passed beyond limitation could be sustained in the eye of law.
6. Learned counsel for the petitioner has referred to an order dated 12.06.2025 passed by this Court in W.P.No. 10895 of 2025 (Annexure P10).
7. We have considered the submissions of learned counsel for the parties and taken note of the materials placed on record as above.
8. On facts and after going through the order dated 02.09.2024 for the Financial Period April, 2019 – March, 2020 vide Reference No.ZD360924002306K, it is apparent that the impugned order has been passed after expiry of the period of limitation i.e., 31.08.2024 for the tax period 2019-20. The Department in its counter affidavit has explained that it was occasion on account of the huge number of orders that the Proper Officer had to pass for two Circles. The Department has also explained in its counter affidavit that on the basis of the subsequent explanation furnished by the petitioner, on the major issue there is no revenue loss. The question of limitation goes to the root of the jurisdiction to pass an order imposing tax liability upon the assessee. Since the order-in-original has been passed and apparently uploaded after the last date for passing orders by 31.08.2024 for the tax period 2019-20, it cannot be sustained in the eye of law. The appellate authority has also failed to appreciate the jurisdictional infirmity in the order-in-original while dismissing the appeal on grounds of delay. The impugned order-in-original and the order-in-appeal are accordingly set aside.
9. The Writ Petition is, accordingly, allowed. However, there shall be no order as to costs.
10. Miscellaneous applications pending, if any, shall stand closed.
