Facts of the Case

The petitioner, Srinivasa Rao Uggini, challenged the Order-in-Original No. VSP-GST-SUPDT-14/24-25(MNM) dated 17.02.2025, relating to the Financial Year 2020-21, passed by the Superintendent of Central Tax. The petitioner contended that the assessment proceedings were initiated and completed without issuing the mandatory pre-show cause intimation in Form GST DRC-01A under Rule 142(1A) of the Central Goods and Services Tax Rules, 2017.

The petitioner approached the Andhra Pradesh High Court under Article 226 of the Constitution of India, seeking quashing of the assessment order along with consequential attachment proceedings.

Issues Involved

  1. Whether an assessment order passed without issuing prior intimation in Form GST DRC-01A under Rule 142(1A) of the CGST Rules, 2017 is legally sustainable.
  2. Whether such violation of the prescribed statutory procedure renders the assessment order invalid.
  3. Whether the matter should be remanded to the assessing authority for fresh assessment after following due process.

Petitioner's Arguments

  • The assessment proceedings were initiated without issuing the mandatory DRC-01A intimation prescribed under Rule 142(1A) of the CGST Rules, 2017.
  • The absence of such pre-notice intimation violated the statutory procedure and principles of natural justice.
  • Consequently, the assessment order dated 17.02.2025 deserved to be quashed along with all consequential proceedings including attachment of bank accounts.

Respondents' Arguments

  • During the hearing, the respondents did not dispute the petitioner's contention that no notice under Rule 142(1A) had been issued prior to the assessment proceedings.
  • The matter was therefore considered in light of the legal position already settled by the Andhra Pradesh High Court in an earlier judgment.

Court Findings / Order

The Andhra Pradesh High Court observed that the controversy had already been settled in New Morning Star Travels vs Deputy Commissioner, wherein it was held that an assessment order passed without prior issuance of notice under Rule 142(1A) of the CGST Rules, 2017 is legally unsustainable.

Following the earlier precedent, the Court:

  • Allowed the writ petition.
  • Set aside the assessment order dated 17.02.2025.
  • Remanded the matter to the assessing authority for conducting fresh assessment strictly in accordance with law.
  • Directed the petitioner to deposit 20% of the disputed tax within six weeks.
  • Clarified that any amount already paid after passing of the impugned order shall be adjusted against the required 20% deposit.
  • Closed all pending interlocutory applications.
  • Passed no order as to costs.

Important Clarification

This judgment reiterates that:

  • Issuance of Form GST DRC-01A under Rule 142(1A) is a mandatory procedural safeguard before final assessment.
  • Failure to comply with this mandatory requirement renders the assessment proceedings vulnerable to judicial review.
  • The High Court reaffirmed the legal principle laid down in New Morning Star Travels vs Deputy Commissioner, thereby strengthening taxpayer rights against assessments passed without following statutory procedure.
  • While granting relief, the Court balanced the interests of revenue by directing payment of 20% of the disputed tax before fresh adjudication.

Sections / Rules Involved

  • Article 226 of the Constitution of India
  • Rule 142(1A) of the Central Goods and Services Tax Rules, 2017
  • Central Goods and Services Tax Act, 2017
  • Assessment Proceedings under GST Law
  • Form GST DRC-01A
  • Principles of Natural Justice

Related Case Law

  • New Morning Star Travels vs Deputy Commissioner – (ST) (2023) 12 Centax 198 (A.P.) – Assessment order passed without issuance of notice under Rule 142(1A) is liable to be set aside.

Link to Download the Order https://www.mytaxexpert.co.in/uploads/1784870272_1931compressed.pdf

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