M/S. Star Enterprises vs. The Deputy Assistant Commissioner Of State Tax - Ii

Facts

The Petitioner, M/s. Star Enterprises, represented by its proprietor, filed a writ petition challenging various orders and notices issued by the State Tax authorities. These included an order dated 10.02.2023 under Section 74 of the CGST Act, a Summary of Order in Form GST DRC-07 dated 10.02.2023, an Appellate Order dated 24.08.2023, a Penalty Show Cause Notice dated 23.06.2023, a Penalty Order dated 26.08.2023, and a Form GST DRC-13 issued under Section 79(1)(c) of the CGST Act. The Petitioner contended that these were issued without proper authentication, valid DIN, and in violation of statutory procedures and principles of natural justice. The tax period in dispute was 2022-23, and the disputed amount was Rs. 1,46,27,861/-. The Petitioner sought quashing of these proceedings and refund of pre-deposit, or alternatively, a fresh adjudication.

Held

The Court noted that both learned counsels submitted that the matter was covered by a previous decision of a coordinate Division Bench in W.P.No.436 of 2026, dated 06.05.2026. Consequently, the Court disposed of the writ petition by directing the petitioner to deposit 25% of the disputed tax within six weeks from the date of the order. This deposit is to abide by the final decision in the order of assessment. Any payments already made or recovered from the petitioner after the impugned order were to be adjusted against this 25% deposit. The Court held that there shall be no coercive steps pending fresh assessment. The impugned assessment order of the 1st respondent dated 10.02.2023 was set aside and the matter was remanded back to the assessing officer for fresh adjudication on its merits, after providing due opportunity to the parties. The consequential orders of penalty and interest were also set aside to enable the 1st respondent to conduct a fresh assessment. The Court did not expressly leave any issue undecided, but the specific grounds of challenge regarding authentication, DIN, and procedural violations were implicitly addressed by the remand for fresh adjudication.

Key Issues

1. Whether the impugned notices and orders, including the assessment order, appellate order, and penalty orders, are liable to be quashed for being issued without proper authentication, valid Document Identification Number (DIN), and in violation of mandatory statutory procedures and principles of natural justice, as contended by the Petitioner? 2. Whether the Petitioner is entitled to a refund of the statutory pre-deposit of 10% of the disputed tax, along with applicable interest, if the impugned proceedings are set aside? Petitioner's Arguments: The Petitioner argued that the impugned notices and orders were illegal, arbitrary, unconstitutional, without jurisdiction, and violative of Articles 14, 19(1)(g), and 265 of the Constitution of India. They contended that the orders were not authenticated by physical or digital signature, lacked a valid DIN, and were issued in violation of mandatory statutory procedures, specifically mentioning Rule 26(3) and Rule 142 of the CGST Rules, 2017, and Sections 74, 75, 79, 107, 161, and 169 of the CGST Act, 2017. They also cited CBIC Circular No.128/47/2019-GST. The appeal was allegedly rejected without considering jurisdictional objections and in violation of natural justice. The Petitioner sought quashing of all proceedings and recovery actions. Revenue's Arguments: The judgment records that the learned Government Pleader for Commercial Tax took notice for the respondents. No specific arguments from the revenue's side are detailed in the provided text.