2025 (10) TMI 109 - HC - GST

Assessment set aside for unsigned DRC-07 and missing Rule 142(1A) notice; remanded for fresh assessment under CGST Act

M/s. Abrars Today Fashion Mall, The Assistant Commissioner, Tirupati, The Joint Commissioner St, Chittoor, The Additional Commissioner St, Appellate Authority, Tirupati, Union of India, State Of Andhra Pradesh.

HC set aside the assessment order dated 29.03.2023 and the appellate order dated 10.12.2024, finding the summary assessment in DRC-07 lacked the assessing ... Levy of penalty u/s 122(1)(ii) of the GST Act, 2017 - summary of assessment order in DRC-07 was not signed by the assessing authority - order of assessment was passed without being preceded by a notice under Rule 142(1A) of GST Rules - HELD THAT:- The effect of absence of the signature in summery order in DRC-07 was earlier considered by this Court in the case of A.V. Bhanoji Row Vs. The Assistant Commissioner (ST) [2023 (2) TMI 1224 - ANDHRA PRADESH HIGH COURT]. A Division Bench of this Court, had held that the signature on the assessment order, cannot be dispensed with and that the provisions of Sections 160 & 169 of the Central Goods and Service Tax Act, 2017, would not rectify such a defect. Further, following this judgment another Division Bench of this Court in the case of M/s. SRK Enterprises Vs. Assistant Commissioner [2023 (12) TMI 156 - ANDHRA PRADESH HIGH COURT] had set aside the impugned assessment order. Though, the grounds raised in the present writ petition were not raised before the respondents either at time of passing assessment order or before the appellate authority, in view of the fact that the respondent authorities are bound to follow the procedure contemplated under the GST Act, 2017 and the Rules made thereunder. Since the respondents did not adhere to the said procedure, the impugned orders passed by the respondents are not sustainable. The assessment order dated 29.03.2023 and the order in appeal dated 10.12.2024 are hereby set aside and the matter is remanded back to the 1st respondent for passing fresh order, after giving notice under Rule 142(1A) to the petitioner in accordance with the provisions of CGST Act and the rules made thereunder - Petition allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether an assessment order (summary in DRC-07) lacking the signature of the assessing authority is vitiated and liable to be set aside. 2. Whether an assessment order passed without issuance of a Tax Intimation Notice under Rule 142(1A) of the GST Rules (as applicable to the relevant period) is invalid. 3. Whether procedural irregularities of the above kind, not raised before the adjudicating authority or appellate authority, can be entertained in writ proceedings as questions of law affecting the validity of the impugned orders. ISSUE-WISE DETAILED ANALYSIS - Issue 1: Validity of assessment summary (DRC-07) without assessing authority's signature Legal framework: Assessment orders under the GST regime must comply with prescribed formalities. Statutory provisions and rules mandate authenticated orders by competent officers; Sections 160 and 169 of the CGST Act concern service and rectification but do not supply an inspecting officer's signature where it is otherwise required for validity. Precedent treatment: The Court relied on earlier Division Bench decisions of this High Court which held that an unsigned assessment order is defective and that Sections 160 and 169 do not cure the absence of signature. Those precedents were followed. Interpretation and reasoning: The Court treated the absence of an assessing authority's signature on the DRC-07 summary as a substantive formal defect that goes to the validity of the order. The reasoning is that authentication by the officer is an essential formality evidencing the order's official provenance and accountability; statutory provisions for service or rectification cannot be read as validating an order that was not properly authenticated. Ratio vs. Obiter: The holding that an unsigned assessment order is invalid and liable to be set aside is ratio decidendi, being essential to the Court's disposition and directly applied to quash the impugned order. Conclusions: The unsigned DRC-07 assessment summary is vitiated; the impugned assessment must be set aside and remitted for fresh consideration with a duly signed order. ISSUE-WISE DETAILED ANALYSIS - Issue 2: Mandatory nature of Rule 142(1A) notice prior to assessment Legal framework: Rule 142(1A) of the GST Rules prescribes issuance of a Tax Intimation Notice to the taxable person prior to passing certain assessment orders. The Rule's requirement is time-sensitive and, pertinent to this matter, the procedure before and after the October 2020 amendment differs; pre-amendment issuance of the notice was mandatory. Precedent treatment: The Court relied on its prior decision holding that, prior to the October 2020 amendment, non-issuance of the Rule 142(1A) notice renders an assessment order invalid. That precedent was followed and applied to the mixed tax periods at issue. Interpretation and reasoning: The Court examined the time span of the assessed periods (covering pre-amendment and post-amendment intervals) and concluded that the authorities were bound to follow the procedural mandate of Rule 142(1A) for the pre-amendment portions. Because no such notice was issued (an omission not disputed by the revenue), the assessment process suffered a procedural illegality which affected the validity of the resultant order. The Court emphasized that statutory procedure governing assessments must be complied with; failure to adhere cannot be salvaged by subsequent inaction or steps. Ratio vs. Obiter: The determination that non-issuance of Rule 142(1A) notice (in the pre-amendment context) invalidates the assessment is ratio decidendi and central to the Court's remedial direction. Conclusions: The assessment order is invalid to the extent it was passed without Rule 142(1A) notice for the periods where the notice was mandatory; fresh adjudication must be preceded by issuance of the prescribed notice in accordance with the CGST Act and Rules. ISSUE-WISE DETAILED ANALYSIS - Issue 3: Permissibility of raising procedural objections belatedly in writ proceedings Legal framework: Writ jurisdiction permits challenge to administrative action on questions of law and jurisdictional error, including significant procedural defects; whether an objection was raised before lower authorities is relevant but not always determinative where the error affects the validity of the impugned order. Precedent treatment: The Court applied its prior authorities treating procedural defects affecting jurisdiction or validity as matters that can be entertained notwithstanding their non-raising before the adjudicating or appellate authorities, particularly where the statutory procedure has not been followed by authorities. Interpretation and reasoning: The Court reasoned that the challenged defects (absence of signature and non-issuance of mandatory Rule 142(1A) notice) are matters of procedural law going to the validity of the assessment; such matters may be raised at any stage, including in writ proceedings, because the authorities are obliged to follow statutory procedure and their failure cannot be remedied by lapse or by the absence of objection in earlier fora. The Court declined to penalize the petitioner for not raising these specific legal/procedural points earlier when they affect the fundamental validity of the orders. Ratio vs. Obiter: The proposition that certain procedural defects affecting validity can be raised in writ proceedings despite prior non-raising is treated as ratio insofar as it underpins the Court's decision to entertain the present petition and set aside the orders. Conclusions: The writ petition was maintainable on the grounds of procedural illegality; the Court exercised jurisdiction to examine and decide these defects even though they were not pressed before the adjudicating or appellate authorities. REMEDY AND CONSEQUENTIAL DIRECTIONS The Court set aside the impugned assessment and appellate orders and remitted the matter to the assessing authority for fresh adjudication. The assessing authority is directed to issue the Tax Intimation Notice under Rule 142(1A) (as required for the relevant periods) and to pass a fresh, duly signed assessment order in accordance with the CGST Act and Rules. The period from the date of the original assessment order until receipt of the present order by the assessing authority is excluded for limitation purposes. FINAL CONCLUSION The impugned assessment and appellate orders are unsustainable due to (a) absence of the assessing authority's signature on the assessment summary (DRC-07) and (b) failure to issue the mandatory Rule 142(1A) notice for the periods where it was required; these defects are substantive procedural illegality and justify quashing and remand for fresh proceedings in accordance with law. No costs were ordered.