Facts of the Case

The petitioner, M/s Sai Stones, a partnership firm, challenged an assessment order dated 16.04.2025 issued in FORM GST DRC-07 for the tax period 2023-24, seeking to set it aside as illegal, time-barred and passed without an opportunity of personal hearing. The petitioner also claimed entitlement to Input Tax Credit of Rs. 42,53,762 as reflected in its GSTR-3B returns and GSTR-9 filed for the year. Assessment proceedings had been initiated by notice dated 18.12.2024, and the petitioner had filed objections dated 21.02.2025, which it alleged were never considered before the impugned order was passed.

Issues Involved

  1. Whether the assessing authority's failure to consider the petitioner's written objections, filed before the order, violated principles of natural justice.
  2. Whether such omission required setting aside the assessment order and DRC-07 summary.

Petitioner's Arguments

  • The show cause notice suffered from absence of a DIN number, rendering it questionable.
  • Objections dated 21.02.2025 were duly filed but were not adverted to or discussed anywhere in the assessment order.
  • The petitioner was entitled to claim Input Tax Credit of over Rs. 42.5 lakh reflected in its GSTR-3B and GSTR-9 returns, which the impugned order disregarded.

Respondent's Arguments

  • The department's counsel sought instructions and later placed on record a written submission by the first respondent confirming that objections dated 21.02.2025 were indeed received.
  • However, the department could not show that supporting documentary evidence accompanying those objections had been filed or examined.

Court Order / Findings

  • On the basis of the department's own written instructions confirming receipt of the objections without their consideration, the Court held that failure to consider a taxpayer's objections before passing an adverse assessment order amounts to a clear violation of principles of natural justice warranting judicial intervention.
  • The writ petition was allowed, setting aside the assessment order dated 16.04.2025.
  • The matter was remanded to the first respondent for passing a fresh assessment order after due notice and an opportunity of hearing to the petitioner.

Important Clarification

  • An assessment order that is silent on objections demonstrably filed by the assessee before its passing is vulnerable to being set aside for breach of natural justice, irrespective of other technical grounds raised.
  • A department's own written confirmation of receipt of objections, without evidence of their consideration, can be decisive against sustaining the order.

Sections Involved

  • Section 73/74, GST Act, 2017 - determination of tax liability and the mandatory consideration of the noticee's reply/objections.
  • Section 75(4), GST Act, 2017 - opportunity of hearing before an adverse order.

Decision – In Favour of

Decided in favour of the assessee; assessment order set aside and remanded for fresh consideration.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: W.P. No. 21940 of 2025
  • Coram: Justice R. Raghunandan Rao and Justice Challa Gunaranjan
  • Date: 10th September, 2025

Link to Download the Order

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