Partly allowed

M/s. Pbl Transport Corporation Pvt. Ltd, v. The Assistant Commissioner (St)

Andhra Pradesh HC3 Jan 2024WP/33477/2023

Case brief

AI extract

What is this about?

The High Court of Andhra Pradesh quashed a Final GST Audit Report because the proper officer failed to consider the petitioner's reply to a discrepancy notice before finalizing findings, in violation of Rule 101(4) of APGST/CGST Rules, 2017 and principles of natural justice under Article 226.

What did the court decide?

Quashed the Final Audit Report dated 22.12.2023; directed respondents to consider petitioner's reply dated 19.12.2023 and finalize the audit.

M/s. Pbl Transport Corporation Pvt. Ltd, Vs The… — GST and Indirect Tax | Andhra Pradesh HC (2024)

¶1

IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction)

¶2

THURSDAY, THE FOURTH DAY OF JANUARY TWO THOUSAND AND TWENTY FOUR

¶3

PRESENT

¶4

THE HON’BLE SRI JUSTICE RAVI NATH TILHARI

¶5

AND

¶6

THE HON’BLE SRI JUSTICE HARINATH.N

¶7

WRIT PETITION NO: 33477 OF 20?.?

¶8

Between:

¶9

M/s. PBL Transport Corporation Pvt. Ltd, Represented ShriRaiesh Poosarla It's

¶10

...PETITIONER

¶11

AND

¶12

The Assistant Commissioner (ST), Regional GST Audit and Enforcement 9 B, Visakhapatnam. ' Additional Commissioner (ST), Regional GST Audit and Enforcement

¶13

Office First Floor, VMRDA, Block B, Visakhapatnam

¶14

RevenueThe StateDepartment,of AndhraA.P.Pradesh,Secretariat.RepresentedVelegapudiby its Principal^ i^ecretary.Secretarv D-no film"' Visakhapatnam Division-

¶15

, U no. « 1-63/10, Plot no. 15, Meher plaza, Naukanaqar Uostairs satvam

¶16

super market, Peddawaltair, Visakhapatnam-530017. ^ ...RESPONDENTS

¶17

mmmsmi mmssmSm

¶18

arbitrary, without jurisdiction, unfair, unreasonable, unconstitutional aaainst tn the subi‘'eS^L°ttr^^^ H' contrary to various precedents^{laid^downin} Con^muflnn violative of Article 14, 300A and Article 19(1)(g) of the Constitution of India. Hence, the proceedings of the 1st Respondent and ora?e'iablerbf.'r' H ^udit R'e^oort in adTare liable to be set aside in present facts and circumstances of the case. lA NO: 1 OF 209? h.:??v““ •' - zrs,-;.r■ ?.r-s-; s tge statutory liabilitiesTn^spec of a Led Ref NrzML273Sn5rH't Note issueTvide jus ice ^°3712230060051 dated 12.12.2023 (Annexure^{P-3)intheinterestof}

¶19

Counsel for the Petitioner: SRI ANIL BEZAWADA

¶20

Counsel for the Respondents No.1 to 4: GP FOR COMMERCIAL TAX The Court made the following: ORDER

¶21

THE HON’BLE SRI JUSTICE RAVI NATH TILHARI AND

¶22

THE HON’BLE SRI JUSTICE HARINATH NUNEPALLY

¶23

WRIT PETITION No.33477 OF 2023

¶24

JUDGMENT;- (per Hon’ble Sri Justice Ravi Nath Tilhari)

¶25

Heard Sri Anil Kumar Bezawada, learned counsel for^the petitioner and learned Government Pleader for Commercial^Tax for the respondents and perused the material on record.

¶26

The petitioner by means of this writ petition under Article 226 of the Constitution of India is challenging^theFinal Audit Report dated 22.12.2023 (Ex.Pl).

¶27

The challenge is mainly on the ground of violation of the principles of natural justice. The submission^isthatthe petitioner had filed reply dated 19.12.2023 to the^discrepancy notice under Rule 101 (4) of the Andhra Pradesh Goods^and Services Tax/Central Goods and Services Tax Rules, 2017 (in short, APGST/CGST Rules, 2017) served on the petitioner^on 12.12.2022, but without considering the same the Final^Audit Report was submitted.

¶28

On 02.01.2024, this Court passed the following

¶29

order:-

¶30

“While challenging the proceedings of respondent No.l, final audit report dated 22.12.2023 (PI), learned counsel for the petitioner submits that the discrepancy notice

¶31

¶32

under Rule 101(4) of the APGST/CGST Rules, 2017 was served on 12.12.2023, to which, the petitioner filed reply on 19.12.2023 within time. But, in the final audit report, the petitioner’s reply was not considered. He further submits that the final audit report at page No.57 of paper book mentioned that “the tax payer did not file any reply to the proposed notice”. He submits that on consideration of the reply, the proper officer has to finalize the findings of the audit. Consequently, in his submission, there is violation of principle of natural justice and basing^onthe final audit report, no further proceedings can be initiated. 2. Learned Government Pleader for Commercial Tax seeks time to obtain instructions with respect to the filing of petitioner’s reply to the discrepancy notice. 3. Post on 04.01.2024 in motion list.”

¶33

Pursuant to the order dated 02.01.2024, learned Government Pleader obtained instructions and based on the written instructions he submits that the petitioner filed the reply on 19.12.2023. The same was not noticed by the authority and consequently, it escaped consideration while finalizing findings of the audit vide Final Audit Report. 6. Rule 101 of the APGST/CGST, Rules 2017 reads as under:-

¶34

Audit:(1) The period of audit to be conducted under sub section (1) of section 65 shall be a financial year [part thereof] or multiples thereof (2) Where it is decided to undertake the audit of a registered person in accordance with the provisions of section 65, the proper officer shall issue a notice in

¶35

I I

¶36

¶37

FORM GST ADT-01 in accordance with the provisions of sub-section (3) of the said section. (3) The proper officer authorised to conduct audit of the records and the books of account of the registered person shall, with the assistance of the team of officers and officials accompanying him, verify the documents^on the basis of which the books of account are maintained and the returns and statements furnished under the provisions of the Act and the rules made thereunder,^the correctness of the turnover, exemptions and deductions claimed, the rate of tax applied in respect of the supply of goods or services or both, the input tax credit availed^and utilised, refund claimed, and other relevant issues^and record the observations in his audit notes. (4) The proper officer may inform the registered person of the discrepancies noticed, if any, as observedⁱⁿ the audit and the said person may file his reply cind^the proper officer shall finalise the findings of the audit after due consideration of the reply furnished. (5) On conclusion of the audit, the proper officer shall inform the findings of audit to the registered person in accordance with the provisions of sub-section (6) of section 65 in FORM GST ADT-02.”

¶38

Sub Rule (4) of Rule 101, provides that the proper officer may inform the registered person of the discrepancies noticed, if any, as observed in the audit and the said person may file his reply. The proper officer shall finalise^thefindings of the audit after due consideration of the reply furnished. In view of Rule 101(4), it is evident that after informing^aboutthe discrepancies noticed, if the person flies the reply,^thesameis to be considered and on such consideration, the findings^ofthe Final Audit Report are to be furnished. Here, it is now not disputed that the petitioner filed the reply and the^samewasnot considered while finalizing the findings of the audit. The Final

¶39

¶40

Audit Report is therefore in violation of the principles^ofnatural justice as also the statutory provisions. 8. Consequently, the impugned Final Audit Report deserves to be quashed. The writ petition deserves to be allowed with further directions to the respondents. Any further proceeding if initiated, based on the impugned Final Audit Report, can also not stand. 9. The writ petition is partly allowed. The impugned Final Audit Report is quashed only on the aforesaid ground. The respondents shall now consider the petitioner’s reply dated 19.12.2023 to the discrepancy notice dated 12.12.2023 and shall finalize the audit report. Thereafter, they shall proceed further, in accordance with law. 10. No order as to costs.

¶41

As a sequel thereto, miscellaneous petitions, if any pending,

¶42

shall also stand closed.

¶43

SDI- B. CHITTI JOSEPH //TRUE COPY// ASSISTi^T REGISTRAR REGISTRAR

¶44

ASSISTi^T REGISTRAR REGISTRAR SECTION OFFICER

¶45

To,

¶46

The Assistant Commissioner (ST), Regional GST Audit and Enforcement Office, First Floor, VMRDA, Block B, Visakhapatnam. 2. The Additional Commissioner (ST), Regional GST Audit and Enforcement Office, First Floor, VMRDA, Block B, Visakhapatnam 3. The Principal Secretary, Revenue Department, State of Andhra Pradesh, A.P Secretariat, Velegapudi. 4. The Assistant Commissioner (ST), Siripuram Circle, Visakhapatnam Division1, D-no. 8-1-63/10, Plot no. 15, Meher plaza, Naukanagar, Upstairs satyam supermarket, Peddawaltair, Visakhapatnam-530017 5. OneCCto SRI. ANIL BEZAWADA Advocate [OPUC] COMMERCIAL TAX, High Court of Andhra Pradesh. 7. Three C.D. Copies Nm MBT

HIGH COURT

DATED: 04/01/2024

ORDER

WP.No.33477 of 2023

ALLOWING THE WP IS PARTLY WITHOUT COSTS

M/s. Pbl Transport Corporation Pvt. Ltd, v. The Assistant Commissioner (St)

Case brief

What is this about?

What did the court decide?

M/s. Pbl Transport Corporation Pvt. Ltd, v. The Assistant Commissioner (St)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

M/S.Vijaya Venkata Durga Oil Traders, Vijayawada. Vs Commr. Officer, Vijayawada and Another

Oil and Natural Gas Corporationltd., Rajahmundry Ast. Rajahmun Vs the Govt of a.P., Revenue Dept (Ct), and 3 Others

M/S. Mezaab Leathers, Guntur District Vs the Assistant Commercial Tax Officer, Tirupati

M/S Rkec Projects Limited Vs Additional Commissioner

M/s.Thriveni Earth Movers Private Limited, Vs The Commissioner of Central Tax

M/s. Royal Constructions, Vs The Additional Commissioner (Ct)