BharatTaxGST

Avexa Corporation Private Limited vs. The State Of Andhra Pradesh

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WP/10094/2024HC Andhra PradeshGSTCNR APHC01020019202418 August 2024Bench: R RAGHUNANDAN RAO,VENKATA JYOTHIRMAI PRATAPA9 pages

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Cause title — parties, addresses and appearances
V; • \ \i i) IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction) MONDAY, THE NINETEENTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO AND HONOURABLE SMT JUSTICE VENKATA JYOTHIRMAI PRATAPA WRIT PETITION NO: 10094 OF 2024 Between: M/s AVEXA Corporation Private Limited, Registered Office at H. No. 8-2- 269/S/41, Plot No.41, Sagar Society, Road No.2, Banjara Hills, Hyderabad- 500034. Address Flat No. 303, Royal Paradise Apartments, Harinathapuram, Nellore-524001. Rep by its Authorised Signatory, V.N.Surendra, S/o Srinivasa Raju, Aged about 34 years, R/o D. No. 1-98, Alluri Seetharamaraju Street, Kodurupadu, Allavaram Mandal, East Godavari. ...PETITIONER AND 1. The State of Andhra Pradesh, Rep by its PrI Secy., Revenue Department,(state Tax) Secretariat Buildings, Velagapudi, Amaravati. 2. The Assistant Commissioner, (State Tax) Circle-1, Nellore, Andhra Pradesh ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that the circumstances stated in the affidavit filed therewith, the High Court may be pleased to a writ, order direction more particularly one in the nature of a writ of Mandamus declaring the action of the Respondent authorities particularly Respondent no.2, in u/s. 74 of APGST, COST and IGST Act in more passing the Penalty Order dt. 24.01.2024 : read with Rule 142 of APGST and CGST rules 2017 and S.20 of the GST Act unjust and contrary to the 2017 as being illegal, arbitrary, provisions of the Andhra Pradesh Goods and Services Tax Act, 2017, Central Goods and Services Act, 2017, Integrated Goods and Service Tax, 2017 and Art 14, 19(1)(g), 21 and 300-A of the rules there under and further violative of - Constitution of India apart from being I Justice and to grossly against of Principles of Natural aside the Penalty Order dt. 24.01.2024 consequently set and direct the Respondent no.2 to or er no. ZD370124012774L in form GST APL 04, dt. 22.01.2024. lA NO: 1 OF 9n9A Petition under Section 151 stated in the affidavit filed i pleased to stay all further CPC praying that in the circumstances in support of the petition, the High Court may be

order proceedings in pursuance of the Penalty dt. 24.01.2024 and thereby direct the Respondent no. 2 to not take - Petitioner. any coercive steps against the interest of the Counsel for the Petitioner(s): SRI B. ADINARAYANA RAO SR for SRI JAVVAJI SARATH CHANDRA Counsel for the Respondent No. Counsel for the Respondent No.2 : - The Court made the following: ORDER COUNSEL 1 : GP FOR COMMERCIAL TAX y W.P. No. 10094 of 2024 APHC010200192024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Juri iction) [3493] MONDAY, THE NINETEENTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SMT JUSTICE VENKATA JYOTHIRMAI PRATAPA WRIT PETITION NO: 10094/2024 Between: M/s. Avexa Corporation Private Limited ...PETITIONER AND The State Of Andhra Pradesh and Others Counsel for the Petitioner: 1.JAWAJ! SARATH CHANDRA Counsel for the Respondent(S): 1.GP FOR COMMERCIAL TAX ...RESPONDENT(S) The Court made the following Order: (per Hon’ble Sri Justice R. Raghunandan Rao) Heard Sri B. Adinarayana Rao, learned Senior Counsel representing Sri Javvaji Sarath Chandra, learned counsel appearing for the petitioner and learned Government Pleader for Commercial Tax for respondents.

2.

The petitioner, who was registered under the CGST and APGST Acts, was carrying on business within the State of Andhra Pradesh. The registration of the petitioner had been cancelled, by proceedings dated RRR.J & VJP,J

28.10.

2023, with effect from 31.08.2023. Initially, the petitioner sought revocation, of the cancellation of registration, by application dated 30.10.2023. This application for revocation was rejected, by order dated 24.11.2023. Subsequently, the petitioner filed an appeal against these proceedings, which came to be allowed on 22.01.2024. While the proceedings for restoration of registration were pending, the 2'''^ respondent had issued an intimation under Section 61 of the 3. A.P. Goods & Services Tax Act, 2017 (for short ‘the APGST Act’) dated 13.10.2023 calling upon the petitioner either to pay certain tax amount or to explain why such payment need not be made as there were various discrepancies found in the returns filed by the petitioner for the years 2017- 2018 to 2022-2023. The petitioner responded to this intimation seeking time. Subsequently, the 2'"'^ respondent issued a fresh intimation dated 4. 19.12.2023 under Section 74 of the APGST Act, pointing to a discrepancy of Rs.31,20,23,862/-. Thereafter, a show cause notice dated 26.12.2023 was issued by the 2'"'^ respondent to the petitioner-company demanding an amount of Rs.32,51,66,267/-, on account of discrepancies in the returns filed by the petitioner or to explain, by filing written objections, within 30 days, why such amount should not be collected from the petitioner. The 2^"^ respondent, in the same show cause notice dated 5. 26.12.2023, had also requested the petitioner to choose a date for personal hearing out of three dates, viz., 04.01.2024 or 18.01.2024 or 24.01.2024. W.P.No.10094 of 2024 The petitioner, after receipt of this show cause notice, had approached the 2^^ respondent and submitted a letter, dated 22,01.2024, requesting the 2'^'^ respondent to restore the registration of the petitioner, in view of the orders of the appellate authority setting aside the cancellation of 6. f registration and to grant time to the petitioner to log into the website of the tax department for the purpose of verification of details and for resetting the e-way bill password and for issuance of e-invoices. The petitioner requested two weeks time for filing a detailed reply, after being able to log into the website of the department. The 2"^^ respondent passed an order dated 24.01.2024 confirming 7. the demand raised in the show cause notice and the petitioner was called upon to pay the tax and penalty determined under the said order dated 24.01.2024. The petitioner has approached this Court, by way of the present 8. nd writ petition challenging the said order dated 24.01.2024 issued by the 2 respondent primarily on the ground of violation of principles of natural justice. Sri B. Adinarayana Rao, would submit that the impugned order 9. dated 24.01.2024, suffers from various infirmities. Firstly, the show cause notice, dated 26.12.2023, had granted 30 days time to the petitioner to respond. However, the impugned order has been passed 24.01.2024 even before the period of 30 days had elapsed. Secondly, the petitioner, by letter dated 22.01.2024, had sought time for responding to the show cause notice.

W.P.No.10094of2024 dated 26.12.2023, and also for restoration of the registration of the petitioner. However, this letter, which is clearly not a submission of objections, has been treated as a response to the show cause notice. Thirdly, the presence of the authorized representatives at the office of the 2'"'^ respondent, for submission of the letter dated 22.01.2024, has been treated as if the petitioner had availed the opportunity of personal hearing. Sri B. Adinarayana Rao, learned Senior Counsel would also point out that the options given by the 2'^'^ respondent are dated 04.01.2024, 18.01.2024 and 24.01.2024 whereas the personal hearing said to have been availed by the petitioner is on 22.01.2024, which is not in accord with the show cause notice of the 2^*^ respondent itself.

10.11.

The learned Government Pleader for Commercial Tax would submit that the letter of the petitioner dated 22.01.2024 was in response to the earlier letter dated 13.01.2023. He would submit that the petitioner being fully aware of the show cause notice dated 26.12.2023 had chosen not to respond to the show cause notice and had responded only to an earlier proceedings. He would submit that the conduct of the petitioner in deliberately refusing to respond to the show cause notice dated 26.12.2023 disentitles the petitioner for any relief from this Court.

12.

The requirement of administrative authorities to follow the principles of natural justice is founded on the simple principle that the person on whom action is proposed, should be given the opportunity to set out his

«l\.

t case against such proposed action. This would require that, the person against whom action is proposed is informed of the entire case against him and the material that is proposed to be used against him is also furnished to him. Thereafter, the affected person should be given adequate opportunity to make out his case against the proposed action. This would mean that the affected person should be given an opportunity to gather all the material that he proposes to use against the proposed action. Any variation or violation of this requirement would amount to violation of principles of natural justice, which would render the proposed proceedings invalid. In the present case, the notice was issued on 26.12.2023 granting 30 days time. The impugned assessment order has been passed even before the said period has been elapsed. The petitioner was entitled to gather all the material required for his defense. This would mean that the petitioner would have to be given access to the website of the department, after restoration of registration, with adequate time being given to the petitioner to gather all the details such as e-way bills, e-invoices, etc. In the present case, such an opportunity was not given to the petitioner as the appellate authority’s order, restoring registration, was passed on 22.01.2024 and the impugned order has been passed on 24.01.2024. 13. In the circumstances, this Court is of the opinion that there has 14. been violation of principles of natural justice rendering the impugned order invalid.

W.P,No.10094 of 2024

15.

Accordingly, this writ petition is allowed setting aside the impugned/penalty proceedings of the 2 NOS.ZD370124015440Z nd respondent bearing reference (2017-20), ZD370124015404V (2018-19), ZD370124015419K (2019-20) ZD370124015424T (2020-21), ZD370124015431Y (2022-23)dated 24.01.2024 leaving it open to the 2 nd respondent to undertake assessment proceedings for tax and penalty, on the basis of the show cause notice dated 26.12.2023. However, such proceedings would be taken up after giving adequate opportunity of hearing petitioner by way of granting two weeks time from today to the petitioner to file his objections to the show cause notice. Thereafter, a personal hearing will also be granted to the petitioner. Needless to say the order of assessment shall contain assessment of tax and penalty, if any, shall contain There shall be no order as to costs. to the reasons. As a sequel, pending miscellaneous applications, if any, shall stand closed. K. KASIRAO ACHARI ASSISTANT REGISTRAR //// V; FFICER SEC To,

1.

The Principal Secretary, Revenue Department(State Tax), State of Andhra Pradesh, Secretariat Buildings, Velagapudi, Amaravati.

2.

The Assistant Commissioner, (State Tax) Circle-1, Nellore, Andhra Pradesh

3.

One CC to SRI JAWAJI SARATH CHANDRA Advocate [OPUC]

4.

Two CCS to GP for COMMERCIAL TAX, High Court of Andhra Pradesh. [OUT]

5.

Three CD Copies Madhu

HIGH COURT DATED: 19/08/2024 ORDER % S’ 0 5 SEP 202'! WP.No.10094 of 2024 <1^ m Co o ^ Current Section ^ J £?£spatcv'^£»^^ ALLOWING THE WP WITHOUT COSTS I V IW4 V< I IV.4

Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.