Facts of the Case

M/s. Ganesh Agencies, a proprietorship registered under GST at Vijayawada, was served an assessment order dated 09.01.2023 for the period 01.07.2017 to 31.03.2022, confirming demands including CGST/APGST of over Rs.50.57 lakh, IGST of Rs.95,426/-, penalty exceeding Rs.1.02 crore under Section 74/73(9), and interest of over Rs.50 lakh under Section 50. The petitioner challenged the order before the High Court under Article 226, contending the assessment proceedings were vitiated for want of a mandatory pre-assessment notice and for being passed as a single composite order across differing tax periods.

Issues Involved

  1. Whether an assessment order passed without a prior notice under Rule 142(1)(A) of the CGST Rules is valid.
  2. Whether a single composite order can validly cover multiple distinct tax periods under the GST Act.

Petitioner's Arguments

  • The assessment proceedings were not preceded by the mandatory notice under Rule 142(1)(A) of the CGST Rules, rendering the entire proceeding invalid.
  • A composite order could not lawfully be passed covering different tax periods together, as this defeated the period-wise scheme of assessment under the GST Act.
  • These grounds, taken together, justified setting aside the assessment order dated 09.01.2023 in its entirety.

Respondent's Arguments

  • The Government Pleader, on instructions, candidly submitted that the assessing authority did not have material to show that a notice under Rule 142(1)(A) had in fact been issued prior to commencement of the assessment proceedings.

Court Order / Findings

  • The Court held it must be taken that no notice under Rule 142(1)(A) was issued, following its earlier ruling that any assessment up to 15.10.2020 without such prior notice is invalid.
  • Relying also on a Division Bench ruling that a composite order cannot be passed for different tax periods, the Court set aside the entire assessment order dated 09.01.2023.
  • The matter was remanded to the assessing authority to pass fresh orders after affording a hearing, with the intervening period excluded for limitation purposes.

Important Clarification

  • Issuance of a pre-assessment notice under Rule 142(1)(A) of the CGST Rules before commencing proceedings is a mandatory procedural safeguard, absence of which vitiates the resultant order.
  • Tax authorities cannot club multiple distinct tax periods into a single composite assessment order; each period must be separately assessed.
  • Time consumed between the quashed order and the fresh order stands excluded while computing limitation for re-assessment.

Sections Involved

  • Rule 142(1)(A), CGST Rules, 2017 – mandates a pre-notice intimation before initiating assessment proceedings.
  • Section 74, CGST Act, 2017 – deals with determination of tax not paid by reason of fraud or wilful misstatement.
  • Section 73(9), CGST Act, 2017 – prescribes determination of tax in cases other than fraud.

Decision – In Favour of

Decided in favour of the assessee. The assessment order was quashed for procedural infirmity, with the matter remanded for a fresh, period-wise assessment.

Case Details

Court: High Court of Andhra Pradesh at Amaravati
Case No.: Writ Petition No. 9458 of 2023
Coram: Hon'ble Sri Justice R. Raghunandan Rao and Hon'ble Sri Justice T.C.D. Sekhar
Date of Order: 17.09.2025

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