Mere Communication Suggesting Tax Payment After Summons Does Not Amount to Initiation of Demand Proceedings | HC
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- Last Updated on 21 April, 2025
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Case Details: Trinity Clean Tech (P.) Ltd. vs. Union of India - [2025] 173 taxmann.com 380 (Andhra Pradesh)
Judiciary and Counsel Details
- R. Raghunandan Rao & K. Manmadha Rao, JJ.
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Ponnada Sree Vyas, for the Petitioner.
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Santhi Chandra, Sr. Standing Counsel & Y.N. Vivekananda for the Respondent.
Facts of the Case
The petitioner, engaged in the business of providing environmental and waste management solutions, was summoned under Section 70 of the GST Act by the Directorate General of GST Intelligence (DGGI). The summons sought information and documents from the petitioner, who complied and attended the office with the required materials. Following this, the petitioner received a communication from the respondent stating that they could reduce their tax liability by paying the unpaid GST along with a 15% penalty. The petitioner challenged this communication, which claimed that it was a demand for tax and penalty.
High Court Held
The Hon’ble High Court ruled that the communication sent by the respondent did not create any liability on the petitioner nor did it initiate any proceedings. The communication merely informed the petitioner of the option to reduce their tax liability by paying the outstanding GST along with a 15% penalty, as per the provisions of Section 74 of the CGST Act. The court clarified that this was not an initiation of proceedings and, therefore, the competence of the respondent to issue such a communication was not in question. The writ petition was dismissed, with the petitioner allowed to oppose any future proceedings related to short tax payments or evasion.
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