GST Assessment Set Aside As Officer Ignored Assessee’s Accident: Andhra Pradesh HC

Rajesh Silk Emporium Vs Deputy Assistant Commissioner and Others (Andhra Pradesh High Court)

The petitioner, a registered dealer under the GST Act engaged in the business of sale of silk sarees, challenged the assessment order dated 17.05.2025 passed for the period 2024–25. Following scrutiny of returns, the first respondent issued Form ASMT-10 dated 24.12.2024 regarding discrepancies in returns for April 2024 to November 2024, followed by a show cause notice in Form DRC-01 dated 21.03.2025 under Section 73 of the GST Act, 2017. The petitioner did not file objections or attend the personal hearing as the deponent had met with an accident. The assessment was completed in the absence of any response. Subsequently, to recover the dues, the first respondent issued a notice under Section 79(1)(c) to the petitioner’s bank, which transferred ₹1,70,568 to the department.

The petitioner contended that his relatives had informed the first respondent telephonically about the accident. Pursuant to the High Court’s order dated 24.06.2026 seeking instructions, the Assistant Government Pleader, on instructions, confirmed that such information had indeed been conveyed to the assessing officer. It was also undisputed that the entire assessed liability had already been recovered from the petitioner’s bank.

Considering these facts, the High Court held that the proper officer ought not to have proceeded with the assessment after being informed of the petitioner’s accident. The Court set aside the assessment order dated 17.05.2025, remanded the matter to the first respondent, and directed issuance of a fresh notice, receipt of the petitioner’s objections, grant of an opportunity of hearing, and passing of fresh orders. The Court further directed that the amount already recovered from the petitioner would remain subject to the outcome of the fresh assessment. The writ petition was allowed, with no order as to costs, and pending applications were closed.

FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT

The petitioner is a registered dealer under GST Act, having engaged in the business of sale of silk sarees. It is the case of the petitioner that for the period 2024-25, the 1^st respondent conducted scrutiny of returns of the petitioner and pursuant thereto, issued notice in Form ASMT-10, dated 24.12.2024, calling upon the petitioner to submit explanation as there are discrepancies in the return filed in relation to period April, 2024 – November, 2024.

2. Thereafter, the 1^st respondent issued show cause notice in Form DRC-01 dated 21.03.2025, under Section 73 of the GST Act, 2017. The petitioner could not file its objections inasmuch as the deponent met with an accident, nor he appeared for personal hearing. Pursuant thereto, as there was no response from the petitioner, the 1^st respondent proceeded with the assessment and accordingly passed adjudication order dated 17.05.2025. In order to recover the dues under the assessment order, the 1^st respondent issued notice under Section 79(1)(c) of the Act, to the 4^th respondent bank. Accordingly, the 4^th respondent transferred an amount of Rs.1,70,568/-, in favour of the 1^st

3. It is the specific case of the petitioner that the petitioner could not appear before the 1^st respondent as the deponent met with accident and the same was informed to the 1^st respondent through his relatives. This Court, by order dated 24.06.2026, directed the learned Government Pleader to get instructions in the matter, as to whether the petitioner had responded to the show cause notice.

4. The Assistant Government Pleader for Commercial Taxes, Sri S.A.V.Sai Kumar, on instructions, submits that the relatives of the petitioner telephonically informed the 1^st respondent that the deponent met with accident. Despite the same, for the reasons best known to the 1^st respondent, he proceeded with the matter and passed assessment order dated 17.05.2025. Further, it is also not in dispute that entire liability of the petitioner was recovered from the banker of the petitioner.

5. Having considered the peculiar facts and circumstances of the case, and taking into consideration of the fact that the deponent met with accident and in view of the same, he could not pursue the matter before the 1^st respondent, which the Assistant Government Pleader on instructions fairly confirmed that the 1^st respondent was informed that the petitioner met with accident, this Court is of the opinion that proper officer ought not to have proceeded with the assessment.

6. In the circumstances, this Court deems it appropriate to set aside the impugned assessment order dated 17.05.2025, remand the matter to the 1^st respondent, so as to provide opportunity to the petitioner inasmuch as, he could not participate in the assessment proceedings. Accordingly, the impugned order is set aside and the writ petition is allowed.

7. Further, the 1^st respondent is directed to issue fresh notice
and after receipt of objections from the petitioner and after affording opportunity of being heard, and pass appropriate orders in the matter. It is needless to mention that the amount recovered from the petitioner would be subject to the result of assessment order that may be passed by the 1^st respondent.

There shall be no order as to costs.

As a sequel, pending applications, if any, shall stand closed.