2023 (12) TMI 356 - HC - GST

Procedural Gaps in GST Assessment Invalidate Order, Mandate Proper Notice and Fair Opportunity for Taxpayer Response

HC found multiple procedural irregularities in GST assessment orders. The court set aside the impugned order due to lack of proper annexure with Form GST ... Principles of natural justice - Illusory opportunity to be heard - Validity of show cause notice and annexures - Error apparent on the face of the record - Article 226 - exception to alternate remedyValidity of show cause notice and annexures - Illusory opportunity to be heard - Principles of natural justice - Error apparent on the face of the record - Impugned assessment and demand orders were vitiated for want of a real opportunity to the petitioner and for issuance of DRC-01 without furnishing the annexure. - HELD THAT: - The Court found that Form GST DRC-01 served on the petitioner contained only a summary and was not supported by the annexure to the show cause notice, thereby depriving the petitioner of particulars necessary to make an effective response. The assessment order dated 17.03.2020 being made on the same day as issuance of DRC-01 demonstrated that no real opportunity to be heard was afforded; even if the assessment is taken to have been made on 19.03.2020, a 48-hour period was held to be inadequate. These defects amounted to a violation of the principles of natural justice and constituted an error apparent on the face of the record, permitting exercise of writ jurisdiction despite availability of statutory appeals. [Paras 6]Impugned orders are vitiated for want of a real opportunity to be heard and for issuance of DRC-01 without annexure; proceedings suffer from fatal infirmities.Article 226 - exception to alternate remedy - Error apparent on the face of the record - Relief to set aside the impugned orders and remit the matter for fresh assessment after affording a reasonable opportunity. - HELD THAT: - Recognising that availability of an alternate statutory remedy is not an absolute bar where principles of natural justice have been breached or where there is an error apparent on the face of the record, the Court set aside the impugned orders. The Court permitted the Revenue to re-do the assessment, but only after providing the petitioner a reasonable opportunity to respond in accordance with law. [Paras 7]Impugned order set aside; respondent may redo the assessment after providing the petitioner a reasonable opportunity in accordance with law.Final Conclusion: Writ petition allowed; impugned assessment and demand orders set aside for want of proper notice and opportunity to be heard, with liberty to the Revenue to re-assess after affording a reasonable opportunity; no costs. Issues involved:The issues involved in the judgment include the challenge to an impugned order dated 19.03.2020 made within 2 days of issuance of Form GST DRC-01, lack of opportunity for the petitioner to respond, the timing of assessment orders, and the availability of statutory remedies.Summary:Challenge to Impugned Order:The writ petition challenges the order dated 19.03.2020, contending that it was made shortly after the issuance of Form GST DRC-01, which only contained a summary without providing the necessary annexure for the petitioner to respond adequately. The petitioner argues that the quick succession of orders indicates a lack of real opportunity granted.Timing of Assessment Orders:Another order dated 17.03.2020, Form GST DRC-01, was mentioned, raising concerns that an assessment order in Form GST ASMT-07 was made on the same day, leaving insufficient time for the petitioner to respond effectively. The court notes the lack of explanation from the Revenue regarding the simultaneous issuance of orders.Availability of Statutory Remedies:The Respondent argues that all orders are appealable, suggesting that the writ petition should not be entertained. It is pointed out that previous notices were issued to the petitioner, contradicting the claim of inadequate opportunity. However, the court acknowledges exceptions to the rule of alternate remedy under Article 226 of the Constitution of India, such as violations of natural justice or lack of jurisdiction.Court Decision:The court finds multiple flaws in the impugned order, including the lack of support for DRC-01 with the necessary annexure and the questionable timing of the assessment order. Due to these infirmities, the impugned order is set aside, allowing the Respondent to re-assess after providing the petitioner with a reasonable opportunity. The writ petition is disposed of without costs, and connected miscellaneous petitions are closed.