APHC010099662025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3525] WEDNESDAY, THE NINTH DAY OF APRIL TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE DR JUSTICE K MANMADHA RAO WRIT PETITION NO: 5124/2025 Between: Arhaan Ferrous And Non Ferrous Solutions Private Limited ...PETITIONER AND Assistant Commissioner and Others ...RESPONDENT(S) Counsel for the Petitioner: 1. KARTHIK RAMANA PUTTAMREDDY Counsel for the Respondent(S): 1. Sireesha Rani Vallabhaneni,Standing Counsel For Municipalities 2. GP FOR COMMERCIAL TAX 3. The Court made the following Order: (per Hon’ble Sri Justice R. Raghunandan Rao) The petitioner is registered under the G.S.T. Act, 2017 and he is trading in iron scrap and steel products. The petitioner was assessed with a penalty of Rs.91,27,10,650/-, by an order, dated 19.11.2024. 2. The petitioner has approached this Court, by way of the present Writ Petition, contending that, a Garnishee Order has been issued to the 2 RRR,J & Dr.KMR,J W.P.No.5124 of 2025 customers of the petitioner, more specifically 4th respondent, for recovery of the aforesaid amount, despite the fact that the petitioner had filed an Appeal against the order, dated 19.11.2024. 3. The contention of the petitioner is that Section 107 (7), mandates that there would be no recovery of tax or penalty, levied under the G.S.T. Act, once 10 % of the disputed tax has been paid, while filing an Appeal against the order. The petitioner contends that the entire tax payable by the petitioner has already been paid and as such, the provisions of Section 107 (7) would be available to the petitioner and no penalty can be recovered from the petitioner. 4. The learned Government Pleader for Commercial Tax, on the other hand, contends that, initially, a proper Appeal had not been filed and only an intimation of Appeal has filed before the Authorities. He also contends that, proper Appeal came to be filed much later, on 24.02.2025 and the same came to be admitted, on 01.03.2025. He would submit that, in the absence of an Appeal, the provisions of Section 107 (7) were not available to the petitioner and the Garnishee Order issued, on 18.02.2025, was in accordance with law. 5. The learned Government Pleader for Commercial Tax would also raise contentions regarding the reason why penalty came to be levied against the petitioner. He would also submit that, the penalty came to be levied as a part of a large investigation carried out, in relation to traders in iron and steel. He would also submit that, large scale violations of the G.S.T. Act and Rules were 3 RRR,J & Dr.KMR,J W.P.No.5124 of 2025 found because of which the petitioner had been levied with a penalty of Rs.91,27,10,650/-. 6. The law, relating to stay of operation of orders of assessment and penalty, is clear. 7. Section 107 (6) & (7) of the G.S.T. Act, 2017 reads as follows: “(6) No appeal shall be filed under sub-section (1), unless the appellant has paid - (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him; and (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the said order, 1[subject to a maximum of twenty-five crore rupees,] in relation to which the appeal has been filed: 2[Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent. of the penalty has been paid by the appellant.] (7) Where the appellant has paid the amount under sub-section (6), the recovery proceedings for the balance amount shall be deemed to be stayed.” 8. In the present case, it is admitted that, there is no disputed tax and the entire tax payable by the petitioner has been paid. The only question that remains is whether the penalty levied under the order, dated 19.11.2024, can be recovered from the petitioner, while the Appeal filed by the petitioner is pending and the requirement of payment of 10% of the disputed tax has been complied with. 4 RRR,J & Dr.KMR,J W.P.No.5124 of 2025 9. The provisions of Section 107 (6) & (7) make it clear that there can be no recovery from the petitioner till the Appeal is disposed of. 10. This Court had adjourned this matter from February – 2025 till now. In view of the submissions of the learned Government Pleader that steps were being taken to complete the Appeal Process, at the earliest and it would be difficult for the State to recover the penalty amount from the petitioner, if the amounts, which are held under the Garnishee Order are released to the petitioner. 11. We are unable to assist the State in any manner in this regard in as much as the provisions of Section 107 (6) read with 107 (7) are clear and peremptory. 12. In these circumstances, this Writ Petition is allowed, setting aside the order of attachment or Garnishee Order, dated 18.02.2025. There shall be no order as to costs. As a sequel, pending miscellaneous applications, if any, shall stand closed. ________________________ R. RAGHUNANDAN RAO, J _______________________ Dr. K. MANMADHA RAO, J Date:09.04.2025 Note: Issue C.C. by 10.04.2025 B/o. KPV 5 RRR,J & Dr.KMR,J W.P.No.5124 of 2025 30 THE HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO AND THE HON’BLE DR. JUSTICE K. MANMADHA RAO WRIT PETITION No:5124 of 2025 (per Hon’ble Sri Justice R. Raghunandan Rao) 09.04.2025 KPV