M/S Motiprabha Infratech PVT. LTD. vs. The Union Of INDIA

Held

The Court held that the assessment order dated February 24, 2021, and the notice dated February 15, 2021, were issued in violation of the statutory mandate of Section 73(8) of the CGST/BGST Act, 2017. This section clearly prescribes a minimum 30-day period for the assessee to make payment and respond. The Court noted that the notice dated February 15, 2021, directed the petitioner to file a reply on February 21, 2021, which was well within the 30-day period. However, prior to the expiry of this mandatory 30-day period, the assessing officer proceeded to pass an ex-parte assessment order. The Court found that this procedural lapse was sufficient to vitiate the assessment order. Consequently, the Court quashed the notice dated February 15, 2021, and the assessment order dated February 24, 2021. The Court directed the assessing officer to issue a fresh notice in accordance with the statutory provisions and pass an appropriate order thereafter. The issue regarding the appellate order was rendered moot by the quashing of the assessment order.

Facts

The petitioner, M/s Motiprabha Infratech Pvt. Ltd., challenged an ex-parte assessment order dated February 24, 2021, passed by the Assistant Commissioner of State Taxes (Respondent No. 7) for the financial year 2020-21, specifically for February to September 2020. This order imposed a total liability of Rs. 9,85,119/-. The petitioner also challenged a demand order in Form DRC-07 dated February 24, 2021, issued by the same authority. Furthermore, the petitioner challenged the appellate order dated September 28, 2022, passed by the Additional Commissioner of State Taxes (Appeals) (Respondent No. 5), which rejected the petitioner's appeal on grounds of delay. The petitioner contended that the assessment order and DRC-07 were issued in violation of Section 73(8) of the GST Act, which mandates a minimum 30-day notice period, as the DRC-01 notice was issued on February 15, 2021, and the assessment order was passed merely nine days later.

Key Issues

1. Whether the assessment order dated February 24, 2021, and the demand order in Form DRC-07 dated February 24, 2021, passed by the Assistant Commissioner of State Taxes are bad in law for being issued in violation of Section 73(8) of the CGST/BGST Act, 2017, which prescribes a minimum 30-day notice period, given that the DRC-01 notice was issued on February 15, 2021, and the assessment order was passed on February 24, 2021. 2. Whether the appellate order dated September 28, 2022, passed by the Additional Commissioner of State Taxes (Appeals) is sustainable in law, having rejected the petitioner's appeal on the ground of a 17-day delay. Petitioner's Arguments: The petitioner argued that the assessment order and DRC-07 were passed in complete violation of Section 73(8) of the GST Act, as the statutory 30-day notice period was not afforded. The DRC-01 notice was issued on February 15, 2021, and the assessment order was passed on February 24, 2021, which is only nine days later. The petitioner also contended that the appellate authority illegally rejected their appeal on the ground of delay without appreciating the merits of the case and that the assessment order was passed without proper verification of documents and without giving an opportunity of hearing. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or state respondents.