Assessment Order Issued Within 2 Days of Form GST DRC-01 is Invalid: Madras HC

Tvl.Shanthi Vijay Granites Vs Assistant Commissioner (ST) (Madras High Court)

Introduction: The Madras High Court recently delivered a judgment on the case of Tvl.Shanthi Vijay Granites Vs Assistant Commissioner (ST). The court scrutinized an assessment order dated 19.03.2020, challenging its validity based on the argument that it was issued within 2 days of the issuance of Form GST DRC­01.

Detailed Analysis: The petitioner’s counsel contended that the Form GST DRC-01, serving as a summary of the show cause notice, lacked the necessary annexure crucial for a comprehensive response. Moreover, the petitioner emphasized the questionable nature of an assessment order under Form GST ASMT-07, issued on the same day as the GST DRC-01, leaving inadequate time for a genuine response.

The Respondent argued that all orders were appealable, dismissing the need for a writ petition. However, the petitioner pointed out the lack of a real opportunity, asserting that the order was illusory. The court examined the timeline, discovering two assessment orders for the same period (17.03.2020 and 19.03.2020), raising questions about procedural irregularities.

The court acknowledged the general principle that writ petitions might not be entertained when statutory remedies exist. Still, it highlighted exceptions like violations of natural justice or lack of jurisdiction. Finding merit in the petitioner’s submissions, the court identified multiple infirmities in the impugned order. Firstly, DRC-01 lacked support from the annexure, denying the petitioner essential particulars. Secondly, the assessment order and show cause notice on the same day seemed procedurally unsound, rendering the opportunity illusory.

Conclusion: Due to these fatal infirmities, the Madras High Court set aside the impugned order. The Respondent has the option to re-assess, provided a reasonable opportunity in compliance with the law. While acknowledging the usual reluctance to entertain writ petitions in the presence of statutory remedies, the court emphasized the exceptional circumstances that warranted intervention. The writ petition was disposed of with no costs, and connected miscellaneous petitions were closed.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

This writ petition is filed challenging the impugned order dated 19.03.2020 on the premise that it has been made within 2 days of issuance of Form GST DRC­01 which is the summary of the show cause notice.

2. It is submitted by the learned counsel for the petitioner that Form GST DRC-0 1 served on the petitioner contains only the summary, however, the annexure to DRC-01 was not furnished to the petitioner to enable them to respond. It is further submitted that the very fact that the order has been made and demand under Form GST DRC-07 has been made 2 days after issuance of GST DRC-01 is indicative of the fact that the opportunity granted was not real but illusory.

3. Today, another order dated 17.03.2020 Form GST DRC-01 has been circulated by the Revenue. It is submitted by the learned counsel for the petitioner that if assessment order in Form GST ASMT-07 has been made on the very same day viz., 17.03.2020 on which GST DRC-01 was issued, there was no real opportunity for the petitioner to respond.

4. The learned counsel for the Respondent would submit that in any view all these orders are appealable and therefore the writ petition ought not to be It was further submitted by the learned counsel for the Respondent that DRC-07 dated 17.03.2020 was preceded by another notice dated 27.11.2018 followed by a reminder notice on 29.11.2018 and therefore the submission of the petitioner that they have not been provided with adequate opportunity is contrary to the facts. Thus, there are two orders of assessment one dated 17.03.2020 and the other dated 19.03.2020, in respect of the very same period. The Revenue is unable to explain the same.

5. This Court is conscious of the fact that writ petition under Article 226 of the Constitution of India would not be entertained normally if statutory remedy is However, existence of alternate remedy is not an embargo or an absolute bar to exercise power under Article 226 of the Constitution of India but a self-imposed restriction and the following circumstances viz., violation of principles of natural justice or lack of jurisdiction or error apparent on the face of the record are some of the exceptions carved out to the rule of alternate remedy for exercise of discretion under Article 226 of the Constitution of India.

6. This Court finds merit in the submission of the learned counsel for the petitioner inasmuch as the impugned order suffers from more than one infirmity. Firstly, DRC-01 is not supported by the Annexure to show cause notice and thus the petitioner was not provided with the particulars necessary to respond. Secondly, the assessment order is made on 17.03.2020. One fails to understand as to how the show cause notice as well as the assessment order has been made on the very same day. Thus, the impugned order is made without affording any Assuming that the order is made on 19.03.2020, it is submitted that 48 hours notice is nevertheless inadequate to respond. This Court finds that the opportunity granted was not real but illusory, thereby vitiating the proceedings.

7. In view of the above infirmities, which this Court finds to be fatal, the impugned order is set-aside. It is however open to the Respondent to re-do the assessment after providing the petitioner a reasonable opportunity in accordance with law. The writ petition stands disposed of. No costs. Consequently, connected miscellaneous petitions are closed.