Vasudeva Adigas Fast Food Private Limited vs. Assistant Commissioner Of Commercial Taxes Audit-1.9

Held

The Court held that the impugned assessment orders and notices should be quashed. The reasoning was based on the anomaly pointed out by the petitioner regarding the discrepancy between FORM GST DRC-1A and FORM GST DRC-01. The Court found merit in the petitioner's contention that the respondent had issued FORM GST DRC-01 with observations that were not initially present in FORM GST DRC-1A. The Court directed the respondent to issue a fresh FORM GST DRC-1A for those observations that were referred to in the respective DRC-01 but excluding those already dropped. The Court also extended the limitation for concluding proceedings to 30.06.2024 if the respondent exercised the liberty to issue a fresh notice. Furthermore, the Court directed the refund of Rs. 5,01,778/- to the petitioner, considering the reinitiation of proceedings.

Facts

The petitioner, Vasudeva Adigas Fast Food Private Limited, filed two writ petitions challenging assessment orders and subsequent notices issued by the Assistant Commissioner of Commercial Taxes. The assessment orders pertained to the tax periods July 2017-March 2018 and April 2018-March 2019. The petitioner also challenged notices issued under Section 78 read with Section 83 of the KGST Act and garnishee notices issued to ICICI Bank, leading to the recovery of Rs. 5,01,778/- from the petitioner's bank account. The petitioner's primary grievance was that the respondent issued FORM GST DRC-01 with observations that went beyond the initial FORM GST DRC-1A, which the petitioner argued was contrary to settled law.

Key Issues

1. Whether the respondent erred in issuing FORM GST DRC-01 with observations that traversed beyond the scope of the initial FORM GST DRC-1A, thereby violating settled legal principles? The petitioner argued that the terms of FORM GST DRC-01 cannot go beyond the terms of FORM GST DRC-1A. The respondent conceded that there was an anomaly in the initial notice but contended that the issuance of FORM GST DRC-01 with ten observations was justified. 2. Whether the proceedings initiated by the respondent were impermissible? The petitioner argued that the initiation of proceedings itself was impermissible, even apart from the issue regarding the discrepancy in the forms. The respondent did not present arguments on this specific point, relying on the concession regarding the anomaly.