Facts of the Case

The petitioner, M/s SKI Metal Crafts Pvt. Ltd., challenged a Final Assessment Order dated 27.03.2020 which showed a balance of Rs.18,04,409.43 despite submission of "C" Forms for the year 2015-16, and sought restoration of blocked amounts of Rs.9,74,567 lying in the petitioner's electronic credit ledger with the GST Council. The order was passed on the very date the whole country was placed under COVID-19 lockdown.

Issues Involved

  1. Whether an assessment order passed on the date the nationwide COVID-19 lockdown commenced, without prior notice or opportunity, was sustainable, in light of the Telangana High Court's own coordinate-bench batch ruling on identical assessment orders passed around the same date.

Petitioner's Arguments

  • The impugned order dated 27.03.2020 was per se bad since it was passed when the entire country was under COVID-19 lockdown, making it doubtful the assessing officer was even discharging duties from office at the time.
  • The identical issue, concerning assessment orders passed after 22.03.2020, had already been decided by a Division Bench of the same Court in W.P.Nos.21349 of 2020 and batch (order dated 02.12.2020), which set aside such orders as violating natural justice for want of adequate opportunity, and similar treatment was sought here.

Respondent's Arguments

  • The petitioner had already raised all its objections in an earlier round where the appellate authority set aside the original assessment order and remanded the matter; the present order was passed after such remand, and the petitioner could have no further grievance.
  • A show cause notice was issued with sufficient time for the petitioner to take appropriate recourse, and the assessing officer could not be faulted for finally passing the order on 27.03.2020.

Court Order / Findings

  • Reproducing its own reasoning from W.P.Nos.21349 of 2020 and batch, the Court reiterated that assessees were prevented from representing themselves before assessing authorities from 22.03.2020 onwards due to the Government's lockdown directives, and that authorities could not assume assessees had no objection to assessments being completed in their absence during this period.
  • Consequently, assessment orders passed after 22.03.2020 without affording adequate opportunity were held to violate principles of natural justice and liable to be interfered with.
  • Finding the present case on similar facts, the Court allowed the writ petition, set aside the order dated 27.03.2020, and remitted the matter to the assessing officer for fresh consideration after giving a fair opportunity to adduce additional evidence, directing the petitioner to appear on a fixed date with no further notice to be issued.
  • No order as to costs was made.

Important Clarification

A GST or VAT assessment order finalised during the nationwide COVID-19 lockdown period (from 22.03.2020 onward), without the assessee having had a real opportunity — even where a show cause notice had earlier been issued before the lockdown began — is liable to be set aside for violating natural justice, since authorities could not assume an assessee's silence during the lockdown meant no objection to proceeding.

Sections Involved

  • Central Goods and Services Tax Act, 2017 and corresponding state enactment – governing assessment procedure and the requirement of adequate opportunity before a final adverse assessment order.

Decision – In Favour of

In favour of the Assessee — the final assessment order was set aside for the COVID-lockdown natural-justice defect, with the matter remitted for fresh consideration after opportunity to adduce evidence.

Case Details

High Court for the State of Telangana at Hyderabad; Writ Petition No.176 of 2021; Coram: Hon'ble Sri Justice P. Sam Koshy and Hon'ble Sri Justice Laxmi Narayana Alishetty; Order dated 22.08.2023; CNR not indicated on the order copy.

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.