2021 (10) TMI 837 - HC - GST

Court quashes assessment order citing lack of jurisdiction and violation of tax laws, emphasizing fair opportunity for Assessee.

The Court quashed an assessment order for lack of jurisdiction and violation of tax laws, emphasizing the importance of providing the Assessee with a fair ... Summary of show cause in Form GST-DRC-01 under Rule 142(1) - service by electronic upload through the web portal - opportunity of personal hearing under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017 - mandatory procedural requirement for issuance of summary notice before assessment - quashing and remand for fresh consideration for procedural non-complianceSummary of show cause in Form GST-DRC-01 under Rule 142(1) - service by electronic upload through the web portal - mandatory procedural requirement for issuance of summary notice before assessment - Validity of the assessment order passed on the same day the Form GST-DRC-01 summary was uploaded without affording the assessee any opportunity to respond. - HELD THAT: - The Court held that generation or electronic upload of the summary of show cause in Form GST-DRC-01 under Rule 142(1) is not a mere formality but a mandated procedural step intended to give the assessee an opportunity to respond. Where the summary was uploaded on 04.06.2020 and, on that very date, the assessment order was passed without giving the assessee any breathing time to reply, the procedural requirement was not complied with. Such non-compliance with the mandatory procedure vitiates the assessment order and renders it unsustainable. The Court therefore quashed the impugned order on this ground and directed reconsideration. [Paras 2, 3, 4, 5]Impugned assessment order quashed for failure to afford opportunity to respond to the Form GST-DRC-01 summary; matter remitted for fresh consideration.Opportunity of personal hearing under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017 - quashing and remand for fresh consideration for procedural non-compliance - Scope of directions on remand concerning issuance of fresh summary notice, provision of breathing time, and opportunity of hearing before passing a fresh assessment order. - HELD THAT: - On remand the respondent is required to freshly upload the summary of show cause in Form GST-DRC-01 if a notice has already been issued, ensure that the assessee is given a reasonable breathing time to respond electronically with available records, and afford an opportunity of being heard as contemplated under Section 75(4) before passing any fresh assessment order. The Court emphasised that the reassessment must be conducted in the manner known to law, after giving the assessee the procedural opportunities mandated by the statute and rules. [Paras 5]Matter remitted to respondent with directions to freshly upload the Form GST-DRC-01, allow time to respond and afford hearing, then pass fresh assessment order in accordance with law.Final Conclusion: Impugned assessment order of 04.06.2020 is quashed for procedural non-compliance; matter is remitted to the respondent to issue or re-upload the Form GST-DRC-01, give the assessee reasonable time to respond and an opportunity of hearing under Section 75(4), and thereafter pass a fresh assessment order in accordance with law. Issues:1. Jurisdiction and violation of Section 140(1) of the Tamil Nadu Goods and Services Tax Act, 2017.2. Issuance of notice and summary of show cause under Rule 142(1) of the Central Goods and Services Tax (CGST) Rules.3. Lack of opportunity for the Assessee to respond before passing the assessment order.4. Validity of the assessment order passed without giving breathing time to the Assessee.5. Remittal of the matter for reconsideration by the respondent.Detailed Analysis:1. The petitioner sought a Writ of Certiorarified Mandamus to quash an assessment order issued by the respondent, alleging it was without jurisdiction and violated Section 140(1) of the Tamil Nadu Goods and Services Tax Act, 2017. The petitioner contended that the order should be set aside and a fresh order passed after providing an opportunity for a personal hearing as per Section 75(4) of the Act.2. The respondent revenue, for the financial year 2017-18, initiated a review of the petitioner's monthly returns despite their timely filing. A notice was issued on 13.09.2019, as required by Rule 142(1) of the CGST Rules. However, the summary of the show cause in Form GST-DRC-01 was electronically uploaded on 04.06.2020, and the assessment order was passed on the same day without allowing the Assessee time to respond. The Court noted the mandatory nature of issuing the summary of show cause for the Assessee to have an opportunity to respond.3. The Court observed that the summary of show cause notice is not a mere formality but a crucial step for the Assessee to understand the allegations and respond adequately. In this case, the order was passed on the same day as the uploading of the summary, depriving the Assessee of the opportunity to present their case effectively. Consequently, the Court found the order unsustainable and liable to be quashed.4. Due to the lack of breathing time between the uploading of the show cause summary and the passing of the assessment order, the Court determined that the impugned order could not stand. As a remedy, the Court quashed the order and remitted the matter back to the respondent for reconsideration. The Court directed the respondent to upload the summary of the show cause afresh, allowing the Assessee sufficient time to respond before a fresh assessment order is passed.5. The Court disposed of the writ petition with the above directions, emphasizing the importance of providing the Assessee with a fair opportunity to respond to allegations before finalizing any assessment order. No costs were awarded, and the connected miscellaneous petition was closed, concluding the legal proceedings in this matter.