Gk Enterprises vs. The Assistant Commissioner (St)

Facts

GK Enterprises, a proprietary concern dealing in iron and steel, had its GST registration cancelled on May 21, 2025. Subsequently, the Assistant Commissioner ST passed an Assessment Order on April 6, 2026, in Form GST DRC-07. Aggrieved by this order, GK Enterprises filed a Writ Petition before the High Court of Andhra Pradesh. The petitioner contended that the assessment order was passed mechanically and in violation of the principles of natural justice, without affording a proper opportunity of hearing. The revenue argued that notices were issued, including Form GST DRC-01A and Form GST DRC-01, which they contended satisfied the statutory requirements.

Held

The Court held that the impugned Assessment Order passed by the Assistant Commissioner ST was unsustainable and liable to be set aside. The primary reason was the violation of the principles of natural justice and non-adherence to Section 75(4) of the Act. The Court found that the assessment order was passed in a mechanical manner. It noted that the intimation of tax payable under Section 74(5) mentioned the cancellation of registration on May 21, 2025. The Court questioned how a taxpayer, whose registration is cancelled, would have knowledge of proceedings if access to the GST portal is lost, and observed that the impugned order did not indicate that notices were sent via Registered Post. Furthermore, the assessment order's statement that a personal hearing was accorded was found to be untenable as it did not specify the date of the hearing. The Court relied on its previous decision in M/s. Ocean Sparkle Limited Vs Assistant Commissioner ST. The Court set aside the impugned proceeding but allowed the Assistant Commissioner to initiate appropriate action in accordance with law after issuing proper notices. The period from the order's date to the receipt of the order was excluded for limitation purposes.

Key Issues

1. Whether the Assessment Order, passed by the Assistant Commissioner ST, is unsustainable due to a violation of the principles of natural justice and the provisions of the Andhra Pradesh Goods and Services Tax Act, 2017, specifically concerning the mandatory grant of a personal hearing when an adverse decision is contemplated against the taxpayer (Section 75(4))? Petitioner's Arguments: The petitioner argued that the assessment order was passed mechanically without adhering to the Act's provisions and violating principles of natural justice. They relied on annexed documents (Exs.P1 to P4) to demonstrate that the order was passed without a proper opportunity of hearing, citing Section 75(4) of the Act, which mandates personal hearing in such circumstances. They sought to set aside the impugned order. Revenue's Arguments: The learned Government Pleader for the respondents, taking instructions from the Assistant Commissioner, submitted arguments. While the specific arguments are not detailed, the judgment notes that the revenue contended that prior notices (Form GST DRC-01A and Form GST DRC-01) were issued, satisfying the Act's requirements.