Authorities Cannot Retain Petitioner’s Funds After 10% Pre-Deposit u/s 107 of APGST Act: AP HC Directs Refund Subject to Undertakings [Read Order]
The provisional attachments and recovery orders were subsequently revoked by the authorities, with the petitioner required to retain refunded amounts and sale proceeds in its account, maintaining a minimum balance of ₹221 crores.
Pre-Deposit - APGST Act - AP HC - Refund - taxscan
Pre-Deposit - APGST Act - AP HC - Refund - taxscan
The High Court of Andhra Pradesh directed refund of ₹170 crores recovered subject to the petitioner’s undertakings ,observing that once the statutory pre-deposit of 10% under Section 107 of the Andhra Pradesh Goods and Service Tax (APGST) Act, 2017 was deemed paid, authorities could not retain the petitioner’s funds.
Wingtech Mobile Communications (India)Pvt Ltd.,petitioner-assessee, was issued an assessment order on 02.08.2025, raising a demand of ₹244.63 crores. Earlier, its bank account had been provisionally attached on 17.07.2025, and soon after, a recovery notice dated 19.08.2025 was issued under Section 79(1)(c) of the APGST Act. Based on this notice, the 5th respondent-Bank released ₹170 crores to the 1st respondent.
Due to the attachment and transfer of funds, the petitioner could not file an appeal, as it was required to deposit 10% of the disputed tax (₹24.46 crores). The petitioner then approached the Court seeking reliefs, including setting aside the recovery and attachment orders, refund of the recovered amount, or in the alternative, retention of only 10% of the disputed demand as the statutory pre-deposit with a refund of the balance.
The Court, on 22.08.2025, had allowed the petitioner to file an appeal against the assessment order dated 02.08.2025 and directed that the pre-deposit of 10% of the disputed tax be treated as paid by adjusting ₹24.4 crores from the ₹170 crores already recovered under the recovery order dated 19.08.2025.
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It had further instructed the 3rd respondent to consider the petitioner’s request for refund of the recovered amount and lifting of the bank attachment within one week.
Subsequently, the 3rd respondent, by proceedings dated 01.09.2025, revoked the provisional attachments of 16.07.2025 and 17.07.2025 as well as the recovery order dated 19.08.2025, subject to conditions.
These included revocation of the HSBC Bank account attachment, recognition of the recovered amount as covering the statutory pre-deposit, partial revocation of property attachments, and a direction to retain funds in India to meet the balance demand.
The Court was informed that the petitioner had filed an appeal and that the ₹170 crores recovered was deemed to include the statutory pre-deposit under Section 107(6) of the APGST Act.
The petitioner objected to the condition requiring it to maintain ₹130 crores from sale proceeds, arguing that it was arbitrary since ₹170 crores had already been recovered and Section 107 provided a deemed stay after the pre-deposit. It also highlighted its undertaking not to withdraw sale proceeds until disposal of the appeal.
Justice R.Raghunandan Rao and Justice T.C.D Sekhar held that once the deemed stay under Section 107 came into effect, no further restraints could be imposed. To safeguard both sides, it directed the petitioner to give an undertaking to retain refunded amounts and sale proceeds in its account, ensuring a minimum balance of ₹221 crores, inclusive of the ₹24 crores treated as pre-deposit.
With these directions, the writ petition was disposed of, without any order as to costs, and pending applications were closed.
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