19.12.2022: Assessee To Be Heard Even If No Reply To Notice In DRC-01 Is Filed – One Liner Cryptic Order Rejecting The Explanation Given By The Assessee Not Sustainable – Madras High Court

MadrasThe Hon’ble High Court of Madras vide its order dated 21.11.2022 in the matter of Vinayak Steels Vs. State Tax Officer (Circle) Krishnagiri – I, Dharmapuri Salem in W.P. Nos. 30939 of 2022 and WMP No.s 30329 and 30330 of 2022, set aside the order passed by the Authority finding that it is obligatory on the part of the Authority to hear the assessee before passing any order, even if no reply to notice in Form GST DRC-01 was filed.  Apart, one liner cryptic order rejecting the explanation given by the Assessee is not sustainable.

The Petitioner filed the writ petition before the Hon’ble High Court challenging the impugned order dated 24.06.2022, mainly on the ground of violation of principles of natural justice.

Held: –

  • The Hon’ble Court after considering the submissions made and facts of the case, observed that in the instant matter the impugned order is dated 24.06.2022 and the present Writ petition has been filed beyond the statutory period of limitation for filing appeal. However, there is no serious objection raised on the behalf of the respondents to the maintainability of the Writ Petition.
  • It was found by the Hon’ble Court that main ground argued on the behalf of the petitioner is the violation of principles of natural justice. Further the pre-assessment notice in DRC-01 was issued on 25.05.2022, though, the order has been passed on the basis of petitioner’s reply filed to the verification of petitioner’s return in Form ASMT – 10 on 08.02.2022.
  • The Hon’ble from the perusal of above facts, held that it is incumbent upon the Authority under Section 74 of the Goods and Service Tax, Act, 2017 to hear the petitioner in person, before passing any order.  Apart, the impugned order rejects the explanation given by the petitioner on 08.02.2022 by way of cryptic one liner stating that ‘dealer reply was verified and not accepted so far.’
  • Further, it was found by the Hon’ble Court that there is no doubt that the confirmation of proposals in the aforesaid manner cannot sustain and is liable to be set aside.

The Hon’ble High Court with the above findings, allowed the Writ petition with the directions to the respondent authority to issue fresh notice and after hearing the petitioner pass order in accordance with law.


For more Judgments like this, Subscribe TAXO today

Register Today