Demand order passed is not valid when no proper time was granted to Assessee for collecting relevant document due to GST registration cancellation

[CA Bimal Jain]

The Hon’ble Andhra Pradesh High Court in the case M/S. AVEXA CORPORATION PRIVATE LIMITED VERSUS THE STATE OF ANDHRA PRADESH AND OTHERS - 2024 (8) TMI 1195 - ANDHRA PRADESH HIGH COURT order passed is not valid when no proper time granted to Assessee for collecting relevant document due to GST registration cancellation as the demand order was passed just after the revocation of GST registration cancellation, for gathering of documents.

Facts:

Avexa Corporation (P.) Ltd (“the Petitioner”) the registration of the petitioner for which the Petitioner sought restoration of registration. The application for restoration was rejected against which the Petitioner filed an appeal which was allowed vide order dated January 22, 2024.

During the pendency of appeal, an intimation dated October 10, 2023 was issued under Section 61 of A.P. Goods & Services Tax Act, 2017 (“the APGST Act”) which called for the petitioner to either pay a certain amount or file a reply stating why the petitioner is not liable to pay the demanded amount based on certain discrepancies in return. Further, a fresh intimation was issued and based on the intimation, a Show cause notice (“the SCN”) was issued which based on the discrepancies in the return filed by the petitioner for which the Petitioner was asked to file the reply.

The petitioner submitted a letter interalia demanding for restoration of registration based on the order revoking registration and requested an extension of time for furnishing a proper reply.   .

However, the Revenue Department (“the Respondent”) passed an order dated January 24, 2024 (“the Impugned Order”) confirming the demand raised in the SCN. Aggrieved by the Impugned Order, the Petitioner filed an appeal on the ground that there is a violation of principles of natural justice.

Issue:

Whether order passed is valid when no proper time granted to Assessee for collecting relevant document due to GST registration cancellation?

Held:

The Hon’ble Andhra Pradesh High Court in the case of M/S. AVEXA CORPORATION PRIVATE LIMITED VERSUS THE STATE OF ANDHRA PRADESH AND OTHERS - 2024 (8) TMI 1195 - ANDHRA PRADESH HIGH COURT held as under

• Observed that, “requirement of administrative authorities to follow the principles of natural justice is founded on the simple principle that the person on whom action is proposed, should be given the opportunity to set out his case against such proposed action. This would require that, the person against whom action is proposed is informed of the entire case against him and the material that is proposed to be used against him is also furnished to him. Thereafter, the affected person should be given adequate opportunity to make out his case against the proposed action. This would mean that the affected person should be given an opportunity to gather all the material that he proposes to use against the proposed action. Any variation or violation of this requirement would amount to violation of principles of natural justice, which would render the proposed proceedings invalid”.
• Noted that, the Impugned Order was passed before the expiry of time period of filing reply. Further, the Petitioner was entitled to gather the material required in his defence, for the Petitioner required access to the website which would have been possible after the revocation of registration.
• Further Noted that, no such opportunity was granted to the Petitioner as the appellate order passed the order of revocation of registration on January 22. 2024 and the Impugned Order was passed on January 24, 2024.
• Opined that, there is a violation of principles of natural justice making the Impugned Order invalid.
• Held that, the writ petition is allowed and the Impugned Order was set aside.

 (Author can be reached at [email protected])