Allowed

M/s.Sri Srinivasa Lorry Transport, v. The Assistant Commissioner (St)

Andhra Pradesh HC10 Sept 2024WP/5385/2021

Case brief

AI extract

What is this about?

The High Court considered two writ petitions challenging assessment and penalty orders under the CGST Act. The Court held that no prior authorization was needed under Section 63. It ruled that three adjournments are not mandatory under Section 75. However, it set aside the orders due to the lack of a personal hearing, commonly required for adverse decisions. Fresh proceedings with a hearing were d

What did the court decide?

Assessment and penalty orders set aside; fresh proceedings directed after giving personal hearing to the petitioner.

M/s.Sri Srinivasa Lorry Transport, Vs The… — GST and Indirect Tax | Andhra Pradesh HC (2024)

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

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WEDNESDAY, THE ELEVENTH DAY OF SEPTEMBER i TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO AND THE HONOURABLE SRI JUSTICE HARINATH.N

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WRIT PETITION NO: 5385 & 5456 OF 2021

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WRIT PETITION - 5385 OF 2021

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Between:

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M/s. Sri Srinivasa Lorry Transport, N.H.5, Main Road, Gundlapalli (Village), Maddipalem Mandal, Prakasam District, Rep. by its Managing Partner. Mr.Chatti Veeranjaneyulu

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...Petitioner

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AND

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The Assistant Commissioner (ST), Addanki Circle, Addanki, Nellore Division.

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The Joint Commissioner (ST), Nellore Division, SPSR Nellore District.

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The State of Andhra Pradesh, Rep. by its Principal Secretary, Revenue (CT-II) Department, A.P. Secretariat, Amaravati.

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...Respondents

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petitioner as arbitrary, contrary to law without authority of law and jurisdiction and also the same is in violation of principles of natural justice and Rule of Law and set-aside the penalty proceedings of the 1st respondent as null and void and pass.

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lA NO: 1 OF 2021

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Petition under Section 151 CPC praying that in the^{circumstances} stated in the affidavit filed in support of the petition, the High Court may be pleased to Suspend the operation of the Penalty Proceedings dated 09.11.2020 passed by the 1st respondent Exparte for the tax period 201718 and 2018-19, pending disposal of the above writ petition lA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the^{circumstances} stated in the affidavit filed in support of the petition, the High Court may be pleased to receive the counter copies on record by allowing the leave petition in the above writ petition and pass.

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Counsel for the Petitioner : SRI. SHAIK JEELANI BASHA Counsel for the Respondents: ADDL ADVOCATE GENERAL II

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WRIT PETITION NO: 5456 OF 2021

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Between:

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M/s.Sri Srinivasa Lorry Transport, N.H.5, Main Road, Gundlapalli (Village), Maddipalem Mandal, Prakasam District. Rep. by its Managing Partner. Mr.ChattiVeeranjaneyulu. ...Petitioner

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AND

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The Assistant Commissioner (ST), Addanki Circle, Addanki, Nellore Division.

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The Joint Commissioner (ST), Nellore Division, SPSR Nellore^District.

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The State of Andhra Pradesh, Rep. by its Principal Secretary, Revenue . (CT-II) Department, A.P. Secretariat, Amaravati.

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...Respondents

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Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue any order or direction more particularly^{oneinthenature} of Writ of Mandamus or any other appropriate Writ or^{Orderordirection} declaring the action of the 1®^ respondent in passing^{theProceedings,dated} 21.09.2020, for the tax periods 2017-18 and 2018-19 served on the petitioner on 05.12.2020 by RPAD without granting sufficient^opportunity more particularly not granting an opportunity of being^{heardbeforepassing} proceedings Exparte as arbitrary, contrary to the Provisions^oftheCGST Act/APGST Act, 2017, without jurisdiction and in violation of principles of natural justice and consequently set-aside the Proceedings of the 1st respondent dated 21.09.2020 as null and void

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lA NO: 1 OF 2024

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Petition under Section 151 CPC praying that in the^{circumstances} stated in the affidavit filed in support of the petition, the High Court may be pleased to receive the counter copies on record by^allowing the leave petition in the above writ petition

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lA NO: 1 OF 2021

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Petition under Section 151 CPC praying that in the^{circumstances} stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the Proceedings^dated 21.09.2020 passed by the 1st respondent for the tax period 2017-18^and2018-19, pending disposal of the above writ petition, as otherwise, the petitioner

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Counsel for the Petitioner: SRI SHAIK JEELANI BASHA

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Counsel for the Respondents: ADDL ADVOCATE GENERAL^II

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The Court made the following: Order

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APHC010092832021

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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

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[3488]

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(Special Original Jurisdiction)

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WEDNESDAY, THE ELEVENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO

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THE HONOURABLE SRI JUSTICE HARINATH.N

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WRIT PETITION Nos.5385 & 5456 of 2021

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WRIT PETITION NO: 5385/2021

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Between:

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M/s.sri Srinivasa Lorry Transport,

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...PETITIONER

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AND

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The Assistant Commissioner St and Others

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...RESPONDENT(S)

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Counsel for the Petitioner:

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1.SHAIK JEELANI BASHA

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Counsel for the Respondent(S):

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1.ADDL ADVOCATE GENERAL II

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WRIT PETITION NO: 5456/2021

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Between:

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M/s.sri Srinivasa Lorry Transport

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...PETITIONER

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AND

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The Assistant Commissioner St and Others

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...RESPONDENT(S)

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Counsel for the Petitioner:

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1.SHAIK JEELANI BASHA

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Counsel for the Responderit(S):

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1.ADDL ADVOCATE GENERAL II

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The Court made the following Common Order: (per Hon ble Sh Justice R. Raghunandan RaoJ The petitioner is carrying on lorry transport business in Gundlapalli Village, Maddipalem Mandal, Prakasam District. The premises of the petitioner were inspected by the 1 respondent on 07.11.2019. At that time the petitioner was not a registered dealer under the Andhra Pradesh Goods and Service Tax Act, 2017 [for short “the APGST Act, 2017] or the Central Goods and Service Tax Act, 2017 [for short the CGST Act, 2017]. A show-cause notice dated 17.12.2019 was issued, on the basis of the said inspection. This notice was received by the petitioner on 26.12.2019, after receipt of this notice, the petitioner had submitted a letter, dated 04.01.2020, seeking time to file objections. The said letter was received by the 1®' respondent on 21.01.2020. Thereafter an order of assessment was passed on 21.09.2020. Apart from this an order of penalty was passed on 09.11.2020. It appears that the petitioner had filed objections to the assessment, in October-2020, after the order of assessment had been passed.

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Aggrieved by these two orders, the petitioner has approached this Court by way of W.P.No.5456 of 2021, chaiienging the order of assessment dated 21.09.2020 and W.P.No.5385 of 2021 chaiienging the order of penaity dated 09.11.2020.

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The common grounds in both these cases, raised in these Writ Petitions are as follows;-

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I. The petitioner was not granted an adequate opportunity of hearing as the order had been passed even before the^{petitionercouldfilehis} objections in October-2020.

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Section-75 of the COST Act, 2017 requires three adjournments before an order can be passed, whereas no such adjournments were granted to the petitioner.

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The provisions of the COST Act, 2017 require the^inspecting officer to have previous authorization from the competent^{authorityunder} Section-67 of the COST Act, 2017. Apart from this, a separate authorization has to be given for the said inspecting officer to^take up assessment proceedings, if the said officer is not the proper^{officerundertheprovisionsof} the CGST Act, 2017. Here, a proper officer would be^{theterritorialassessing} authority. In the present case, the 1®' respondent was the Assistant Commissioner (ST), Addanki Circle, whereas, the petitioner^{ispresentlybeing} assessed by the Assistant Commissioner, Ongole-1 and as such, the 1®' respondent ought to have obtained the previous authorization before passing any assessment order. No such authorization^{hasbeenplacedbefore} this Court and consequently, the assessment order and^{theconsequential} penalty order would have to be set aside.

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Sri Shaik Jeelani Basha, learned counsel for the petitioner,^has raised the additional ground, that is not supported^bypleadings, that the assessment order and the penalty order, impugned in the present Writ

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Petition, do not have DIN numbers and the absence of such DIN numbers is fatal to both the orders. He relies upon the Judgment of a Division Bench of this Court in the case of M/s. Cluster Enterprises Vs. The Deputy Assistant Commissioner (ST)-2 & Ors, dated 24.07.2024 in W.P.Nos.13375 & 14045 of 2024.

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The learned Government Pleader for Commercial Tax, in reply to the said contentions and in support of the counter-affidavit filed by the Assistant Commissioner, Ongole circle would submit as follows;-

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I. Section-75 of the COST Act, 2017 only stipulates that more than three adjournments cannot be given. It cannot mean that the three adjournments are compulsory and orders can be passed only after three adjournments.

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II. Section-67 of the COST Act, 2017 stipulates that no inspection of any dealer can be carried out unless the previous authorization is obtained from the Joint Commissioner or the Commissioner. In the present case, such previous authorization was obtained on 05.11.2019 and this an admitted fact. There is no provision for obtaining authorization for connecting assessment proceedings arising out of such inspection, if the assessing authority is the usual territorial assessing authority of such a dealer. In the present case, the petitioner was an un-registered dealer and an assessment of such un-registered dealer is to be carried out under Section-63 of the COST Act

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There is no provision in Section-63 of the CGST^{Act,2017forrequiring} any previous authorization.

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III. The requirement of DIN numbers on the orders is^notmandatory as long as a number is generated by the portal and^{isavailableontheorder.} The purpose of requiring a DIN number or a number generated^{bytheportalis} for the purposes of authenticating the orders and to^{ensurethatun-authorized} proceedings are not taken up. In the present case, both the order of assessment and the order of penalty contained such numbers generated by the portal and as such, there is substantial compliance.

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CONSIDERATION OF THE COURT:-

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Section-67 of the CGST Act, 2017 requires previous^{authorization} from the competent authority before any officer of^{thetaxdepartmentcan} inspect the premises of the dealer or conduct an audit^{oftheaccountsofa} dealer. In the present case, such previous authorization^{hadalreadybeen} given on 05.11.2019.

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On the question of authorization being necessary for^conducting an assessment based on such inspection or audit, the provisions in the CGST Act, 2017 require a closer look. The provisions relating^{toassessmentofa} dealer are contained in Chapter-XII of the CGST Act,^{2017consisting} of Sections-59 to 64. The provisions relating to demands^and recovery are contained in Chapter-XV of the CGST Act, 2017 consisting^{ofSections-73to} 84.

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In the present case, the relevant provision would be Section-63 of the COST Act, 2017 which regulates the assessment of

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persons. Section-63 of the COST Act, 2017 reads as follows:-

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‘‘Section-63: Assessment of unregistered persons.

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Notwithstanding anything to the contrary contained in section 73 or section 74 where a taxable person fails to obtain registration even though liable to do so or whose registration has been cancelled under sub-section (2) of section 29 but who was liable to pay tax, the proper officer may proceed to assess the tax liability of such taxable person to the best of his judgment for the relevant tax periods and issue an assessment order within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates: Provided that no such assessment order shall be passed without giving the person an opportunity uf oGiriy nsdro. 9. This provision authorizes the appropriate officer to assess the tax liability of any taxable person who has not obtained registration even though he is liable to obtain such registration. The language in Section-63 of the COST Act, 2017 does not provide for any prior authorization being necessary where the assessment has been done by the proper officer. The term proper officer” is defined, in Section-2(91) of the COST Act, 2017, to mean an officer to whom any function to be performed under this Act is assigned by the Commissioner. The territorial limit of each assessing officer is assigned by the Commissioner. The learned Government Pleader for Commercial Tax, draws the attention of this Court to the paragraph No.4 of the counter-affidavit filed by the 1 respondent. It is stated that the Adanki circle was the territorial circle for the area in which the petitioner was carrying on business and it was subsequently disbanded and merged into Ongole-1 circle by way of G.O.Ms.No.502, Revenue (CT-1) Department, dated 01.07.2022,^which was published in Andhra Pradesh Gazette on 05.07.2022. In the circumstances, it must be held that the 1®‘ respondent, being Assistant Commissioner (ST),

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Addanki Circle was the appropriate assessing authority^{andastheterritorial} assessing authority did not require any authorization^{underSection-63ofthe} COST Act, 2017.

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Section-75 (5) of the COST Act, 2017 reads as follows:Section -75: General provisions relating to determination^oftax. (1).., (2),.,. (3)... (4) (5) The proper officer shall, if sufficient cause is^{shownbythepersonchargeablewithtax,} grant time to the said person and adjourn the hearing^{forreasonstoberecordedinwriting:} Provided that no such adjournment shall be granted^{formorethanthreetimestoaperson} during the proceedings.”

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The language in this provision is clear and unambiguous.^The said provision only places an outer limit on the number^{ofadjournmentsthat}

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can be granted and the said language does not lend itself^{toaninterpretation} that a minimum of three adjournments have to be given^{beforeanyordercan} be passed.

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The petitioner had raised the ground that an adequate^opportunity of hearing had not been given to the petitioner. The^{show-causenoticewas} received by the petitioner on 26.12.2019. A letter for adjournment was submitted by the petitioner on 21.01.2020. Thereafter, there is absolute silence and no material has been placed before this^{Courttoshowthatthe} petitioner had sought further adjournments any kind. In such circumstances, the passing of the assessment order in Sepetember-2020^{cannotbefaulted} on this ground.

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However, Section-75(4) of the COST Act, 2017 reads^asfollows:-

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“Section(1) -75: General provisions relating to determination of tax. (2) .... (3)

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anv is received in writing from the any adverse decision is contemplated against

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This provision requires an opportunity of hearing to be given if the assessing officer contemplates an adverse decision even if the person does not make any request for such hearing. The show-cause notice dated 17.12.2019 only provides for filing written objections and no personal hearing has been granted. In the ci circumstances, the said assessment order would have to be set aside leaving it open to the respondents to grant such a personal hearing and to pass orders thereafter.

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In view of this direction, it would not be necessary for this Court to go into the question of whether a DIN number i IS needed on every order or not.

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Accordingly, these Writ Petitions are disposed of setting aside the assessment order, dated 21.09.2020, as well as the penalty order, dated 09.11.2020, impugnedi in the present Writ Petitions while leaving it open to the 1 St respondent to undertake a fresh assessment proceeding and consequential proceeding, if any, after giving an opportunity of personal hearing to the petitioner. There shall be no order as to costs.

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closed.

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As a sequel, pending miscellaneous petitions, if any, shall stand Sd/- J SAROJA

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ASSISTANT\ RE^TRAR SECT OFFICER

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//TRUE COPY//

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To,

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The Assistant Commissioner (ST), Addanki Circle, Addanki, Nellore Division. 2. The Joint Commissioner (ST), Nellore Division, SPSR^{NelloreDistrict.}

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The Principal Secretary, State of Andhra Pradesh, Revenue (CT-II) Department, A.P. Secretariat, Amaravati.

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One CC to SRI SHAIK JEELANI BASRA Advocate [OPUC]

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One CC to SRI ADDL ADVOCATE GENERAL II Advocate [OPUC]

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Three CD Copies

HIGH COURT

DATED: 11/09/2024

ORDER

WP.No.5385 & 5456 of 2021

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g 0 7 APR 7m I
Current Section
^spatch^^

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DISPOSING THE WP’S WITHOUT COSTS

M/s.Sri Srinivasa Lorry Transport, v. The Assistant Commissioner (St)

Case brief

What is this about?

What did the court decide?

M/s.Sri Srinivasa Lorry Transport, 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

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