Case Law Details
Adi Lakshmi Cement And Steel Traders Vs Superintendent of Central Tax (Andhra Pradesh High Court)
The Andhra Pradesh High Court addressed two writ petitions challenging assessment orders dated 28 February 2025 issued against the petitioners. The primary contention raised was that these assessment orders were not preceded by notices in Form GST DRC-01A, which, under Rule 142(1A) of the GST Rules, is mandatory before initiating any assessment proceedings.
The respondents initially claimed that non-issuance of such notices would not invalidate the assessment, arguing that Rule 142(1A) had been amended on 15 October 2020 to make the notice requirement directory rather than mandatory. However, the Court noted that the assessments under challenge pertained to a period prior to the amendment. Consequently, the original un-amended Rule 142(1A) applied, requiring mandatory issuance of the notice. Since no Form DRC-01A notice was issued in these cases, the assessment orders were rendered invalid.
The Court referred to its earlier decision in New Morning State Travels vs. The Deputy Commissioner (ST) and Ors., where it was held that an assessment order passed without a prior notice under Rule 142(1A) is invalid. The Standing Counsel’s contention that the amendment made the notice requirement directory was rejected as it was inapplicable to the pre-amendment period.
Accordingly, the Court allowed the writ petitions, quashing the assessment orders dated 28 February 2025. The assessments were remanded to the assessing authorities with a clear direction to issue notices under Rule 142(1A), provide the petitioners an opportunity of hearing, and pass fresh assessment orders in compliance with the mandatory procedure. No costs were imposed, and any pending miscellaneous petitions were closed.
This judgment emphasizes the mandatory nature of pre-assessment notices under Rule 142(1A) for periods prior to the 15 October 2020 amendment, underscoring procedural compliance as essential for the validity of assessment orders under GST law.
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
As both these writ petitions raise a similar issue, they are being disposed of by way of this common order.
2. Heard Sri K. Raghavendra Reddy, learned counsel appearing for the petitioners and Smt. Shanti Chandra, learned Standing Counsel, appearing for the respondents.
3. In both these cases, the petitioners had been served with orders of assessment, dated 28.02.2025.
4. The petitioners have challenged these orders of assessment, by way of these two writ petitions, on various grounds. However, the primary ground raised by the learned counsel for the petitioners is the contention that these orders of assessment have not been preceded by notices under Form GST DRC-01A, which has to be served on the petitioners, under Rule 142(1A) of the GST Rules, prior to the initiation of any proceedings of assessment.
5. Shanthi Chandra had earlier taken time for ascertaining whether such notice has been issued or not.
6. The learned Standing Counsel, on instructions, submits that the records available with the respondents do not indicate any such notice being issued.
7. The question of the availability of an assessment order, without prior issuance of notice in Form GST DRC-01A, under Rule 142(1A) had been considered by this Court in New Morning State Travels vs. The Deputy Commissioner (ST) and Ors. A Division Bench of this Court, had held that an order of assessment passed, without prior notice being issued under Rule 142(1A) would have to be treated as invalid order.
8. Smt. Santhi Chandra, the learned Standing Counsel submits that non issuance of such a notice would not be fatal to the assessment order inasmuch as there was an amendment to Rule 142(1A) wherein the mandatory requirement of issuance of such notice has been watered down and it is only directory by virtue of the said amendment, dated 15.10.2020. She would further contend that since the assessment was initiated, by way of a notice, after the said amendment, the said provision would not be applicable.
9. The aforesaid contention of the learned Standing Counsel would have to be rejected, in the facts of the present case. By virtue of the amendment, dated 15.10.2020, the mandatory requirement set out in Rule 142(1A) was modified into a directory requirement. However, the assessment period, in the present case, is prior to 15.10.2020. Therefore, the un-amended Rule 142(1A) would be applicable and non-issuance of the notice under Rule 142(1A) would render the subsequent order of assessment invalid.
10. Accordingly, these Writ Petitions are allowed setting aside the orders and assessment, dated 28.02.2025. Further, the assessments are remanded back to the assessing authorities for initiating the assessment proceedings after issuance of notice under Rule 142(1A) and to pass necessary orders after an opportunity of hearing is given to the petitioner. There shall be no order as to costs.
As a sequel, pending miscellaneous petitions, if any, shall stand closed.
Author Bio
