2022 (10) TMI 1064 - HC - GST

Validity of assessment orders - allegation that the dealers, from whom the petitioner has purchased the goods, are not existing/fictitious - Provisional attachment of petitioner's properties - legality of impugned proceedings in Form GST DRC 22 dated 7.5.2022 - violation of principles of natural justice - HELD THAT - A perusal of the revised notice issued in GST DRC-01, dated 30.05.2022, would show that the authority relied upon the material, which was not furnished to the petitioner. The assessment order does not indicate the dealers, whom the assessing authority claimed to have been examined to show that the petitioner has purchased goods from the dealers who are non-existing/fictitious - Since this material forms part of the impugned order, we are of the view that the assessing authority ought to have furnished the said material enabling the petitioner to make a representation or produce any material contra to the same, to substantiate his plea. Non-furnishing of the same, would be violation of principles of natural justice. Ergo, the impugned order passed by respondent No.1 in Form DRC-07, dated 20.06.2022, is set aside and the matter is remanded back to the assessing authority - the provisional attachment order passed by respondent No.2 in Form GST DRC-22, dated 07.05.2022, is set aside - Petition allowed by way of remand.

Summary

Issues involved:
Challenge to provisional attachment of properties, legality of assessment order, violation of principles of natural justice.

Analysis:
1. Provisional Attachment of Properties: The petitioner challenged the provisional attachment of their properties by respondent No.2 under Section 83 of the A.P.GST Act. The petitioner argued that the Joint Commissioner lacked the authority to issue the attachment order and that their explanation was not recorded before the attachment. The learned counsel contended that the provisional attachment order was unlawful. On the other hand, the Government Pleader for Commercial Tax argued that the Joint Commissioner had the power to issue the attachment order and defended the assessment order based on available material.

2. Legality of Assessment Order: The assessment order issued by respondent No.1 was contested by the petitioner. The petitioner claimed that they were not provided with the material relied upon by the assessing authority, which hindered their ability to respond adequately to the show cause notice. The petitioner also argued that the assessment order was flawed as it did not specify the dealers, toll gates, and vehicle owners on which the assessment was based. The Court found that the failure to furnish this crucial material to the petitioner amounted to a violation of principles of natural justice.

3. Violation of Principles of Natural Justice: The Court emphasized the importance of adhering to principles of natural justice in administrative actions. It held that the failure to provide the petitioner with the material forming the basis of the assessment order deprived the petitioner of the opportunity to present a counterargument or evidence. Consequently, the Court set aside the impugned order and remanded the matter back to the assessing authority. The Court directed the authority to furnish the relevant documents to the petitioner and consider any additional objections raised by the petitioner before passing a new order.

In conclusion, the High Court allowed the Writ Petition, setting aside both the impugned order and the provisional attachment order. The Court emphasized the need for procedural fairness and directed the assessing authority to provide the petitioner with the necessary documents and consider any additional objections before issuing a new order.