Andhra Pradesh High Court - Amravati
Megha Engineering And Infrastructure ... vs Additional Commissioner, on 8 May, 2025
Author: R Raghunandan Rao
Bench: R Raghunandan Rao
I/~
lN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATl
(special original Jurisdiction) ~
THURSDAY, THE EIGHTH DAY OF MAY u,
- - =- .-_a TWO THOUSAND AND TWENTY FIVE ,
HONOURABLE THE CHIEFPJRuEsSTEINcTE|| DHIRAJ 5rNGH THAK~U^'kb:ve
Z= AND - `iq?A
THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO +
WRIT PETITION NO: 1O596 OF 2025\/
Betwee n :
1. Megha Engineering & Infrastructure Ltd.
#54-20/6-9A, Dwaraka Apartments,
Kanakdurga Officer's Colony,
Road No. 3, V'ljayawada - 520008.
Represented by its Authorised Signatory
Mr. P.V. Subba Reddy.
S/o. P. Veera Reddy,
Aged about 45 years,
Occ: Shareholder of Petitioner No.1
Having office at #54-20/6-9A, Dwaraka Apartments,
Kanakdurga Officer's Colony,
Road No. 3, Vijayawada - 520008.
.. Petitioners
AND
Additional Commissioner,
O/a the Commissioner of Central Tax
GST Bhawan, Kannavari Thota,
Guntur - 522004.
Commissioner of Central Tax
GST Bhawan, Kannavari Thota,
Guntur - 522004.
State of Andhra Pradesh
Through its Principal Secretary,
Revenue (CT) Department,
Secretariat, Velagapudi, Guntur D'lstrict.
4. Union of India,
Through the Secretary, Ministry of Finance,
Department of Revenue, North Block,
New Delhi -11OOO1.
..Respondents
petition under ArtI'CIe 226 of the constitution of India prayI'ng that in the
circumstances stated I-n the affidavit filed therewith, the High court may be
pleased to issue appropriate wr,lt(s), Direction(s), or order(s), more
Particularly in the nature of WrI-i Of Mandamus,
a- Declaring Section 7(1)(aa) and the Explanation thereto of the
Central Goods and services Tax Act, 2017 and the
corresponding Andhra Pradesh Goods and services Tax Act,
2O17 as unconstitutional and violative of Article 366(29-A)(b),
Article 246A read with Article 366(12A), Article 14 and Article
19(1)(g) insofar as it is made applicable to works contracts
executed and supplied by sub-contractors and / or sub-
subcontractors in the facts and circumstances narrated herein
above;
b. AIternatively, in the event of section 7(1)(aa) and the
Explanation thereto of the central Goods and services Tax Act,
2017 and the corresponding Andhra Pradesh Goods and
Services Tax Act, 2O17 being held as constitutional, then
declaring that section 7(1)(aa) and the Explanation thereto
under the Central Goods and service Tax Act, 2017 and the
corresponding Andhra Pradesh Goods and service Tax Act, 2017
will only have prospective effect w.e.f. o1.01.2022;
_ :;:-?i
C. Declaring Entry 3(iii) of Notification No. ll/2017 -Central Tax
(Rate) dated 28 June 2017 substituted by Notification No.
20/2017 - Central Tax (Rate) dated 22 August 2017 along with
the correspond-lng Entry 3(iii) of State Rate Notification ll/2017
- State Tax (Rate) dated 29 June 2017 (G.O.Ms. 259)
substituted by State Notificat-Ion in G.O.Ms. No. 386 dated 22
I
August 2017 as effective from OI July 2017 and being equally
applicable to the entity that executes the works contact in
reality including sub-subcontractors to the Contractor in public
interest;
Declaring Entry 3(vii) of Notification No. ll/2017 -Central Tax
(Rate) dated 28 June 2017, substituted by Notification No.
31/2017 -Central Tax (Rate) dated 13 October 2O17 along with
the corresponding along with the corresponding Entry 3(vii) of
State Rate Notification ll/2017 - State Tax (Rate) dated 29
June 2017 (G.OIMs. 259) substituted by State Notification No.
31/2017 - State Tax (Rate) in G.O.Ms. No. 552 dated 16
November 2017, as effective from 01 July 2017, and being
equally appl'lcable to the entity that executes the works contact
in reality including sub-subcontractors to the Contractor in public
interest;
e. Declaring Entries 3(ix) and (x) under Notification No. ll/2017 -
central Tax (Rate) dated 28 June 2017 substituted by
Not'lfication No. 01/2018 - Central Tax (Rate) dated 25 January
G
2018 along with the corresponding Ent:ries 3(ix) and 3(x) under
St:ate Rate Notification No. ll/2017 -State Tax (Rate) dated 29
June 2017 (G.O.Ms. No. 259) substituted by State Notification
No. O1/2018 - State Tax (Rate) in G.O.Ms. No. 88 dated 19
February 2018 as unconstitutional and ultra vires Article
366(29A)(b) of the Constitution;
Declaring Section 16(2)(c) of the Central Goods and Services
Tax Act, 2O17, and the corresponding Section 16(2)(c) of the
Andhra Pradesh Goods and Services Tax Act, 2017, as
unconstitutional and violative of Articles 14, and 19(1)(g) in the
facts and circumstancds narrated herein above;
g. Declaring the exercise of power and jurisdiction under section
16(2)(c) by the Respondent No.1 without first recovering tax
from the suppliers or sellers as being manifestly arbitrary,
unreasonable and capricious;
Declaring the Impugned Circular No. 183/15/2O22-GST dated 27
December 2022 as unconstitutional and ultra vires the
provisions of the central Goods and Services Tax Act, 2017, and
the corresponding Impugned State Circular dated 06 January
2O23 bearing File Nor REVO3-12039/1/2023-GST- CCT, and
consequently set aside the same;
Declaring that the requirement of tax invoice details to be
disclosed by the suppl-ler to the Respondent Department under
Form GSTR-1 and to be reflected in the recipientls Form GSTR-
-TI
2A as a pre-condit-Ion for the Petitioner No.1 to claim input tax
credit is pursuant to section 16(2)(aa) which is only applicable
prospectively w.e.f. 01 January 2022;
Declaring the Impugned Order-in-Original No. GUN-GST-OOO-
ADC-77/2024-25-GST dated 01 February 2025, served on 03
February 2025 issued by Respondent No.1 as being
i
urICOnStitut-lOnal and ultra VireS the Provisions Of the Central
Goods and Services Tax Act, 2017 and the corresponding
Andhra Pradesh Goods and Services Tax Act, 2017 and
consequently set aside the same
and to pass such other order or orders as this Hon'ble Court may
deems fit just and proper in the circumstances of the case. /
IANO: 1 OF2025
Petition under Section 151 CPC praying that in the
J
circumstances stated in the affidavit filed in support of the petition, the High
Court may be pleased to Stay the operation of Section 7(1)(aa) and the
Explanation thereto under the Central Goods and Services Tax Act, 2017, and
r
the corresponding Section 7(1)(aa) and Ex#anation under the Andhra
Pradesh Goods and Services Tax Act, 2017 insofar as Petitioner No.1 is
concerned, Pending disposal of WP No.10596 of 2025, on the file of the High
Court.
J-
[ANO: 2OF2025
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 Stay the operatl'on of Entries 3(ix) and (x) under
+
NotifI'CatiOn No.ll/2017 -Central Tax (Rate) dated 28 June 2017 substituted
by Notification No. 01/2018 -Central Tax (Rate) dated 25 j=nuary 2018 along
with the corresponding En{rjes 3(ix) and 3(x) under State Rate Notification No,.
\-
11/2017 -State Tax (Rate) dated 29 June 2017 (G.O.Ms. No. 259) substituted
by state Notification No. 01/2018 -State Tax (Rate) in G.O.Ms. No. 88 dated
19 February 2018 insofar as Petitioner No.1 is concerned, Pending disposal of
WP No.10596 of 2025, on the file of the High Court. l/
IANO: 3OF2025
Petition under Section 151 CPC praying that in the
circumstances stated in the affidavit filed I-n Support Of the Petition, the High
L/
Court may be pleased to Stay the operation of Section 16(2)(c) of the Central
Goods and Services Tax Act, 2017 and the corresponding Section 16(2)(c) of
ra
the Andhra Pradesh Goods and Services Tax Act, 2017, insofar as Petitioner
No.1 is concerned, Pending disposal of WP No.10596 of 2025, on the file of
theHighCourt. /
IANO:4OF2025
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 Starthe operation of the Impugned Circular No.
S _ _/
183/15/2022-GST dated 27 December 2022, pending disposal of the Writ
E=
Petition and the corresponding Impugned State Circular dated 06 January
2023 bearing File No. Impugned State Circular dated 06 January 2023
J
J \/
bearing File No.REVO3-12039/1/2023-GST-CCT, Pending disposal of wp
No.10596 of 2025, on the file of the High Court. L~
IANO:5OF 2025
_ -/
Petition under sectI-On 151 CPC praying that in the
circumstances stated in the affidavit filed in support of the petition, the High
court may be pleased to stay{he legal validity and operation of the !Impugned
Order-in-Original No.GUN-GST-000-ADO-77/2024-25-GST dated 01 February
J
2025, served on o3 February 2025, issued by Respondent No.1, Pending
disposal of WP No.10596 of 2025, on the file of the High Court. ~
IANO: 6OF2025
Petition under section 151 CPC praying that in the
circumstances stated in the affidavit filed in support of the petitl'on, the High
~
-
Court may be pleased to Direct Respondents not to take any further steps
PurSuant tO the Impugned Order-in-Original No. GUN-GST-000-ADC-77/2024-
25-GST dated 01 February 2025, served on 03 February 2025, issued by
Respondent No.1, Pending disposal of WP No.10596 of 2025, on the fI'le Of
the High Court. ~
The petition coming on for hearing, upon perusing the petition and the
affidavit filed in support thereof and upon hearing the arguments of sri vimal
``.,,..a
Varma Vasi Reddy, Advocate for the petitioners, and of smt. santi chandra,
Standing Counsel for the Respondents, the court made the following. ~
ORDER
Heard Sri Vivek Reddy, learned senior counsel representing Sri VimaI Varma Vasireddy, learned counsel appearing for the petitioners and Smt. Santi Chandra, learned standing counsel appearing for the respondents.
2. The lst petitioner herein, which is a company registered under the GST regime, is in the business of executI-ng Works COntraCtS and other construction projects. The lst respondent, passed an order of Ei assessment, dated 01.02.2025, bearing DIN No.20250255YYKOOOO62146F, in relation to the tax period from July, 2017 to March 2021. ~
3. The lSt respondent passed the aforesaid assessment order. under Section 74 of the GST Act, 2017, holding that the petitioner was the member of a consortium, to whom sectI-On 7(1)(aa) of the GST Act, would be applicable and the input tax credit available to the petitioner would have to be disallowed on account of the infraction of section 15(2)
(c) of the GST Act:. ~
4. This order of assessment is challenged by the petitioners, by Way Of this Writ PetitjOn[ v~
5. The petitI-OnerS COntend that the order of assessment is beyond limitation, without furl-SdiCtiOn and based on provisI-OnS Of law which are rot in existence. Apart from this, the petitioners assail the impugned Order on the ground that the impugned order covers various perI-OdS Of taxatI-On and such a comprehensive order, relating to different tax periods, is not perm`issible, under the scheme of the GST Act. ~
6. Sri Vivek Reddy, learned Senior Counsel appearing for sri vimaI Vasireddy, learned counsel for the petitioners, would contend that the Hon'ble High Court of Kerala had struck down section 7(1)(aa) of the
-
GST Act, by way of a judgment, dated ll.04.2025, in W.A.No.1659 of 2024, between lndI-an Medical Association vs. union of India. The learned Senior counsel would submit that by virtue of the ratio of the judgment of the Hon'ble Supreme Court in Kusum Ingots & AIloys Ltd., vs. Union of India and Anr.,1 a provision of law, which has been struck down by a High Court, would stand invalidated across India, and as such, the order of assessment, based on section 7 (1) (aa) of the GST Act, requires to be set aside. J
7. Learned Senior Counsel would also contend that section 16(2)(c) of the GST Act, whl-ch casts the burden of demonstrating bona tide payment of tax by third parties, on the registered person, is impermissible and arbitrary. He would submit that the said provision had been challenged before various High Courts and interim directions, restrainI-ng the authorl-ties from collection of tax, on the basis of section 16(2)(c) of the GST Act, are being uniformly passed by ail the High Ei Courts.
8. The learned Senior Counsel would also submit that the impugned order relates to the period from July 2017 to March 2021. He would submit that this period consists of four assessment years and a consolidated order, for all these periods, is not permissible. L~
9. The learned senior co`unsel would also contend that the impugned order is beyond limjtatjon, jn as much as, invocation of Section 74 of the GST Act, for obtaining extension of limitation, is impermissible. The learned Senior Counsel would contend that Section 74 of the GST Act, has been invoked on the ground that the petitioner had not disclosed turnovers, in terms of section 7(1)(aa), where as / Section 7(1)(aa) came to be incorporated in the statute in the year 2022, vyith retrospective effect from o1.07.2017. The learned Senior Counsel would contend that the question of willful suppression would arise when the provision was available on the statute book, on the day when turnovers were being disclosed by the petitioner, and section 74 could not have been invoked by any stretch of imagination, in the present situation. v,I
10. Smt. Santhi Chandra, learned Standing Counsel appearing for the respondents seeks tI-me for Obtaining instructions and-filing counter.u~ ll. The aforesaI-d COntentiOnS Of the learned Senior Counsel merit serious consideration. However, this court, as a matter of practice, has been granting stay of recovery of taxes, penalty and interest, in relation to assessments under Section 16(2)(c) of the GST Act, on payment of 10% of the disputed tax. `~ I
12. Accordingly, there shall be stay of recovery of tax, penalty and I-nterest, raised under the impugned assessment order, dated o1.02.2025, ~ pending iurther orders, subject to the condition that the petitioner shall deposit 10% of the disputed tax, within a period of six weeks from today.~ -
SD/-Elfi. PRABHA,KAE?i{&. RAC} / AS`crj!STANT' REG!STFZAR //TRUE COPY// C}FF§CF_R For I To,
1. The Additional Commissioner, o/o the commissioner of central Tax GST Bhawan, Kannavari Thota, Guntur -522004. ~
2. The Commissioner of central Tax, GST Bhawan, Kannavari Thota, Guntur - 522004. L/
-
3. The Principal Secretary, State of Andhra Pradesh, Revenue (CT) Department, secretariat, velagapudi, Guntur District.
4. The Secretary, UnI'On Of India, Ministry of Finance, Department of Revenue, North Block, New Delhi -110001 (1 to 4 by RPAD) u
5. One CC to Sri Vimal Varma Vasi Reddy, Advocate [OPUCr
6. One CC to Smt. Santi Chl3Pdra, Standing Counsel [OPUC]
7. One CC to Deputy solicitor General, High Court ofAP [OPUC]
-./
8. Two CCs to GP for Commercial Tax, High Court of Andhra pradesh [OUT]
9. Onesparecopy L~ ¥ HIGH COURT DATED: 08/05/2025 ORDER WP.No.10596 of 2025 INTERIM STAY :l$ 5 away 2%l