GST demand order set aside for non-issuance of mandatory show cause notice under Section 142(1)(A)

The AP HC set aside a demand order dated 28.12.2023 issued under Section 73 of CGST Act, 2017 against a GST-registered cell phone seller. The petitioner challenged the order citing non-issuance of mandatory show cause notice under Section 142(1)(A) prior to assessment, violation of limitation periods under Sections 73(10) and 70(2), and breach of natural justice. The Court relied on precedent holding that non-issuance of notice under Section 142(1)(A) for assessment periods before the 15.10.2020 amendment renders assessment proceedings invalid. The Revenue did not dispute the absence of such notice. The Court declared the demand order invalid and remanded the matter to the assessing authority for proper assessment under statutory procedure, excluding the intervening period for limitation purposes.

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Summary:The Andhra Pradesh High Court, per Hon'ble Justice R. Raghunandan Rao, set aside the demand order dated 28.12.2023 issued under Section 73 of the CGST Act, 2017 against the petitioner, a GST-registered cell phone seller. The petitioner challenged the order on grounds including non-issuance of a mandatory show cause notice under Section 142(1)(A) prior to assessment proceedings, violation of limitation periods under Sections 73(10) and 70(2), and breach of natural justice.The Court relied on its prior rulings (notably W.P.No.35710 of 2022 and New Morning Star Travels vs. Deputy Commissioner, 2023 (12 Centax 198 (AP)) holding that "non-issuance of a notice under Section 142(1)(A) for any assessment period prior to the amendment of Section 142(1)(A) carried out on 15.10.2020 would render any assessment proceedings invalid." The Revenue did not dispute the absence of such notice.Accordingly, the Court held the demand order invalid and remanded the matter to the assessing authority to complete assessment in accordance with statutory procedure under the GST Act and rules. The Court excluded the period from the impugned order to receipt of this order for limitation purposes and made no order as to costs.

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