Dismissed

M/s. Creative Enterprises v. The State of Telangana

Telangana HC3 Feb 2026WP/19357/2025

Case brief

AI extract

What is this about?

Writ petition challenging blocking of Input Tax Credit in the petitioner's Electronic Credit Ledger as time-barred under Rule 86A. The court found an order-in-original imposing tax, interest and penalty under Section 74 of the TGST Act preceded re-blocking, and that material facts were suppressed; it declined to interfere and dismissed the petition without costs.

What the court decided

AI extract

M/s. Creative Enterprises Vs The State of Telangana — GST and Indirect Tax | Telangana HC (2026)

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[³⁴⁸⁸ I

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

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TUESDAY, THE THIRD DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE APARESH KUMAR SINGH AND THE HONOURABLE SRIJUSTICE G.M. MOHIUDDIN

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WRIT PETITION NO: 19357 OF 2025

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Between:

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M/s. Creative Enterprises, Rep by the Proprietor Shri Krowidi Lakshmi Narasimham, S/o Shri Ranga Rao, F-7, Baba Cafe Point, Road No. 12, Nacharam, Hyderabad, Telangana.

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.PETITIONER

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AND

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1 . The State of Telangana, Represented by its Principal Secretary, Commercial Taxes, Secretariat, Hyderabad.

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The Commissioner of the Commercial Taxes Department, Telangana State, C.T Complex, Nampally, Hyderabad-S00 001.

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The Assistant Commissione r, Ramgopalpet-Ranigunj ll Circle, Begumpet Division, H.No.6-3-789, 3rd Floor Pavani Prestige, Ameerpet, Hyderabad 500 016.

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...RESPONDENTS

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Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a direction or Orders, more particularly in the nature of a writ of Mandamus or any other appropriate Writ, declaring that blocking of lnput Tax Credit of the Petitioner to the tune of Rs. 13,38,98,200.00 (Rupees Thirteen Crore Thirty Eight Lakh Ninety Eight Thousand and Two Hundred only) showing in Electronic Credit Ledger of the Petitioner at GSTN portal as void ab-initio, without jurisdiction, illegal, arbitrary, violation of principles of natural justice and principle of audi alteram partem, and violation of Article 19(1Xg) and 300A of the Petitioner

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lA NO: 1 OF 2025

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit liled in support of the petition, the High Court may be pleased to grant stay an interim relief to lift the blocking of lnput Tax Credit of the Petitioner to the tune of Rs. 1:1,38,98,200.00 (Rupees Thirteen Crore Thirty Eight Lakh Ninety Eight Thousand arrd Two Hundred only) showing in Electronic Credit Ledger of the Petitioner at GSTN portal as void ab-initio, without jurisdiction, the action of the Respondent p,ending disposal of this Writ Petition.

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Counsel for tlre Petitioner: SRI M.UMASHANKAR

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Counselfor the Respondents: SRI SWAROOP OORILLA,

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SPECIAL GOVT PLEADER FOR STATE TAX

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The Court ma,Ce the following: ORDER

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IN THE HTGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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THE HON'RI,E CHIEF JUSTICE, SRI APARR,S KUMAR SINGH

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AND

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SRI

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WRIT PETITION No.19357 of 2,025

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DATED: 03.02.2026

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Between:

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Ws. Creative Enterprises,

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Rep. by the Proprietor Shri Krovvidi Lakshmi Narasimham, S/o. Shri Ranga Rao, F-7, Baba Cafe Point, Road No.12, Nacharam, Hyderabad, Telan gana.

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Petitioner

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AND

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The State of Telangana,

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Represented by its Principal Secretary,

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Commercial Taxes, Secretariat, Hyderabad & 2 others

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... Respondents

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ORDER:

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Heard Mr. M.Uma Shankar, learned counsel appearing for the

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petitioner and Mr. Swaroop Oorilla, learned Special Government Pleader

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for State Tax appearing for the respondents

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The petitioner assailed the blocking of its Electronic Credit Ledger

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allegedly beyond the period of one year on the ground that it is void ab

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initto, without jurisdiction and violative of the statutory Rules.

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on 28.08.2025, when the matter was taken up, upon hearing learned counsel fior the petitioner, learned Special Government Pleader fbr State Tax subrnitted that if the blocking of the Electronic Credit Ledger of the petitioner has rernained for more than one year, it would be unblockecl. He also sou;3ht to seek instructions on the blocking of the Electronic Credit Ledger ttn 30.05.2025 and 17.06.2025. The counter affidavit was filed thereafter. On 17.12.2025, after hearing the parties, the following order was passied taking note of the stand of the respondents in their counter affidavit:

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"Sri M. Uma Shankar, learned counsel appears for petitioner.

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Sri K. Sai Akarsh, learned Assistant Government Pleader appears for Sri Swaroop Oorilla, learned Special Government Pleader for State Tax, for respondents.

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The counter-affidavit filed orr behalf of respondent No.3 fails to answer whether any proceedings under Section 13174 of the Central Goods and Services Tax Act, 2017 (for short 'the Act'), have been issued for illegal or irregular availment of lnput^'Iax Credit (lTC) by the petitioner. The counter-affidavit alleges that the Electronic Credit Ledger (ECL) of the pe:titioner was blocked because of availment of ITC against supplies from non-existent suppliers. ECL has heen re-blocked on 30.05.2025, the day on which it was unblocked, in terms of Rule 86A of the Central Goods and Services Tax Rules, 2017. The petitioner is against the reblocking of ECL. It is submitted that there was no ITC available at the time of blocking.

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Learned counsel for the respondents is allowed two (2) weeks' time to seek instruction on the issue whether any proceedings have been initiated against the petitioner under Section 73/74 of the Act.

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List after two (2) weeks."

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Learned Special Government Pleader for State Tax appearing for the respondents has produced the copy of the order-in-original dated 01.05.2025 passed against the petitioner on the basis of a show cause notice dated 17.10.2024 wherein the Proper Officer has imposed tax liability to the tune of Rs.1,36,05,5871- after disallowing the Input Tax Credit. It has also imposed further tax liability on account of Less Reported turnover in GSTR3B compared to P&L turnover and interest thereupon to the tune of Rs.81,66,1241-. Petitioner has also been irnposed penalty under Section 122(l)(vii), Section 122(l)(ii) and Section 122(2)(b) as also under Section 125 of the Telangana Goods and Services Tax Act, 2017 (hereinafter referred to as 'the TGST Act') for not filing GSTR09C to the tune of Rs.2,76,47,4441-. Late fee has been imposed for delayed filing of GSTRO9 to the tune of Rs.1,45,2001-. The grand total of the tax liability, interest, fee and penalty over all these heads comes to Rs.4,95,64,354/-. It is submitted that after passing of the order-in-original, the Electronic Credit Ledger of the petitioner was blocked on 30.05.2025 again. The period of one year in terms of Rule 864 of the Central Goods

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and Serv ces Tax Rules, 2017 has not expired since the date of blocking. It is submitted that there were no lnput Tax Credit available at the time of blocking.

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The u'rir petition was filed in July, 2025. 'the writ affidavit, howe'er, conspicuously lails to ref'er to any of these facts.

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Learned counscl I'or the petitioner subrnits that the challenge in the present urit petition is limited to blocking of the Illectronic Credit Leciger only. I-herelbre, other ancillary facts norv being brought to the notice of the Court werc not requircd to be rct-erred to.

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Howevcr, we do not appreciate the stand of the petitioner. I1 writ proccedinBs, il party has to collte clean before the Court disclosing all relevant nraterial facts qernlane to the issue in controversy. The blocking of the llle:ctronic credit t-edger \/as accompanied by a proceeding uncler Section 7 4 ol' the TGS I Act. This was a material fact required ro be disclosed in the writ petition for the Court to form an opinion on the cause of action laised herein. We do not encourage such an approach on the part of the petitioner. At the same time, since the re-blocking of the Electronic Credit Le<lger has a backgrouncl in the imposition of tax, interest, fee and penalty in a proceeding under Section 74 of the TGST Act to the tune of

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) J

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Rs.4,95,64,3541- and the period of one year has not expired since the blocking of the Electronic Credit Ledger on 30.05.2025, this Court does not find any reason to interfere in the matter.

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