The Andhra Pradesh High Court has disposed of a writ petition filed by Sakthi Ferro Alloys India Pvt. Ltd., which had challenged a massive tax demand of over Rs. 130 crore raised by state tax authorities, directing the company to pursue its case before the appellate authority under the GST framework.
The Bench of Justice R. Raghunandan Rao and Justice Challa Gunanranjan held that disputed factual issues—such as genuineness of suppliers and transportation records—require detailed inquiry, which cannot be undertaken in writ proceedings.
The dispute arose after the Deputy Commissioner (ST), Tirupati, issued assessment orders under Section 74 of the APGST Act for the financial years 2017–18 to 2020–21, alleging wrongful availment of Input Tax Credit (ITC). The total tax, penalty, and interest demand was pegged at Rs. 130.61 crore.
Background
The company, engaged in steel scrap trading, logistics, warehousing, and TMT bar manufacturing, was first subjected to inspection in 2020. Notices and audits followed in 2022 and 2023, leading to assessment and rectification orders in September 2024.
The firm challenged the proceedings primarily on two grounds: that the audit was carried out beyond the permissible period under Section 65, and that authorities wrongly invoked Section 74 instead of Section 73 to overcome limitation hurdles, despite no proof of fraud or suppression.
The tax department, however, alleged that the company availed ITC from “non-existent entities” and failed to establish actual movement of goods, citing that several vehicle numbers used in invoices were not even goods carriers.
As the company had already deposited 10% of the disputed tax, the Court allowed it to be treated as pre-deposit under Section 107 of the GST Act, enabling the company to file an appeal within three weeks. The Court also excluded the period spent in the writ petition from limitation calculations.
Case Details
Case Title: M/S.Sakthi Ferro Alloys India Pvt.Ltd Versus The State Of Andhra Pradesh
Case No.: Writ Petition No: 27655/2024
Date: 26.09.2025
Counsel For Petitioner: Uttara Legal
Counsel For Respondent: GP
