1 APHC010405402024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3525] WEDNESDAY ,THE NINETEENTH DAY OF MARCH TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE DR JUSTICE K MANMADHA RAO WRIT PETITION NO: 22215/2024 Between: Trinity Clean Tech Private Limited ...PETITIONER AND Union Of India and Others ...RESPONDENT(S) Counsel for the Petitioner: 1. PONNADA SREE VYAS Counsel for the Respondent(S): 1. SANTHI CHANDRA (Sr. Standing Counsel for CBIC) 2. Y N VIVEKANANDA The Court made the following order: (per Hon’ble Sri Justice R. Raghunandan Rao) The petitioner is registered under the GST Act. 2. The 2nd respondent, who is the Senior Intelligence Officer, Directorate General of GST Intelligence, Zonal Unit, Visakhapatnam, had issued summons, under Section 70 of the GST Act, seeking information and details from the petitioner. Pursuant to this notice, the deponent to the affidavit filed in support of the writ petition, is said to have attended the office of the 2nd 2 respondent, on 05.07.2024, with all the necessary material. According to the deponent, he was forced to sign on certain documents and various papers, even though the same were not furnished to the petitioner. 3. Thereafter, there appears to be correspondence between the respondents and the petitioners resulting in a communication, dated 30.07.2027, bearing DIN No.202407DSS60000298455. 4. The petitioner being aggrieved by this communication, has approached this Court on the ground that such a communication, which is in the form of a demand for tax and penalty, would amount to initiation of proceedings against the petitioner, and the said communication had been signed by the 2nd respondent, who is not competent to initiate such proceedings. 5. The 2nd respondent has filed a counter affidavit submitting that the said communication does not in any manner initiate any proceedings and is only a communication informing the petitioner that the petitioner can reduce his liability, by paying GST, which has not been paid along with 15% of such tax as penalty. This communication is said to have been sent because show cause notice initiating the process has not yet been issued. 6. Section 74 of the CGST Act becomes applicable when there is evasion or payment of tax by way of willful proposition, misstatement or fraud in the payment of tax. In such circumstances, the authorities are permitted to levy penalty amounting 100% of the tax which has not been paid. However, the very same provision also provides for graded response. That is, personal 3 liability to pay tax, can reduce his liability of penalty from 100% to various percentages of penalty, depending on the stage at which the person liable to pay tax admits his liability, and pays the short paid tax along with penalty. In this process, if the person admits short payment and pays the tax along with 15% of the tax penalty, no further steps would be taken under Section 74 of the CGST Act. 7. In the present case, the communication sent by the 2nd respondent is in line with the provisions of Section 74 of the CGST Act. 8. The aforesaid communication does not in any manner create any liability on the petitioner nor would amount to initiation of any proceedings against the petitioner. In such circumstances, the competence of the 2nd respondent, who issued such communication, would not arise as it is a general communication setting out the law. 9. With the above observations, this writ petition is closed leaving it open to the petitioner to set out its grounds of opposition to any proceedings initiated against the petitioner for short payment of tax or willful evasion of tax or wrongful availment of ITC. There shall be no order as to costs. As a sequel, miscellaneous petitions, pending if any, shall stand closed. _______________________ R. RAGHUNANDAN RAO,J ______________________ DR. K. MANMADHA RAO,J RJS 4 63. HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO & HON’BLE DR. JUSTICE K. MANMADHA RAO WRIT PETITION NO: 22215 of 2024 (per Hon’ble Sri Justice R. Raghunandan Rao) Dt: 19.03.2025 RJS