The Andhra Pradesh High Court quashed two GST demand orders on conditions, a 10% deposit in one and ₹5,000 costs in the other, after the dealers claimed their records and returns went unverified.

The Andhra Pradesh High Court has set aside two GST assessment orders, one arising from proceedings under Section 74A of the GST Act, where the officer confirmed demands without examining records or returns that the dealers said would answer the proposals. Relief in each case was made subject to conditions. [Global Enterprises v. Deputy Assistant Commissioner ST & Ors., 2026-juristway.com-3267-HC(Andhra Pradesh)-GST; Ken Fab LLP v. Deputy Assistant Commissioner of State Tax Krishna District & Ors., 2026-juristway.com-3268-HC(Andhra Pradesh)-GST]

A Division Bench of Justice Ninala Jayasurya and Justice T.C.D. Sekhar decided both writ petitions. Justice Ninala Jayasurya wrote the order in Global Enterprises and Justice T.C.D. Sekhar in Ken Fab.

Global Enterprises. A trader in taxable and exempt aqua feeds and chemicals was issued Form GST ASMT‑10 on 27 May 2025 alleging that ITC for 2024-25 had to be restricted and reversed under Rules 42 and 43. After an intimation in Form GST DRC‑01A under Section 74A and an SCN in Form GST DRC‑01, an order for ₹3,04,486 towards tax, interest and penalty was passed on 18 Feb 2026. The dealer said it kept separate records for taxable and exempt goods, claimed credit only on inputs used for taxable supplies, and by letter dated 4 Feb 2026 had offered its records for verification. It also relied on an earlier conclusion order in Form GST DRC‑05 holding it not liable to restrict credit on identical facts.

The Court noted that three hearings had been granted, but held that once the dealer offered its records, it should have been given one opportunity to produce them before the order was passed; not doing so violated natural justice. The dropping of proceedings on similar transactions for an earlier period weighed in the dealer’s favour. The order was set aside subject to deposit of 10% of the disputed tax within six weeks of receipt of the Court’s order, failing which the relief stands dissolved. Consequential actions, including bank attachment, were revoked, and the period from the impugned order to receipt of the Court’s order is excluded for limitation.

Ken Fab. A dealer in PVC and UPVC windows and doors did not respond to Form GST ASMT‑10 for 2024-25 or to an SCN proposing ₹4,62,379, and the officer confirmed the proposal in Form GST DRC‑07 because no objections were filed. The firm said the notices were only uploaded on the portal, that it learnt of the order from a recovery letter dated 10 Sep 2026, and that the tax had been paid in its return for April 2024. The State argued that ample opportunity had been given and that the petition was filed a year and six months after the order without explaining the delay.

Without going into the merits, the Court set aside the order and directed a fresh order after notice and hearing, subject to payment of ₹5,000 as costs to the Andhra Pradesh High Court Legal Services Committee within two weeks of receipt of the Court’s order.

2026-juristway.com-3267-HC(Andhra Pradesh)-GST | 2026-juristway.com-3268-HC(Andhra Pradesh)-GST