Sunrise Engineering vs. The State Of Andhra Pradesh

Held

The Court allowed the writ petition, setting aside the impugned assessment order dated April 7, 2025, and the consequential attachment notice in Form DRC-16 dated October 8, 2026. The primary ground for allowing the petition was the violation of natural justice. The Court noted that the assessment order explicitly referenced a personal hearing notice dated April 15, 2025, yet the order itself was passed on April 7, 2025, which was prior to the date of the notice. This inconsistency, for which no explanation was provided by the respondent authorities, demonstrated that the petitioner was not afforded a proper opportunity of hearing. The Court found that on this ground alone, the writ petition deserved to be allowed. The 2nd respondent was directed to conduct fresh assessment proceedings after issuing proper notice and providing an opportunity of being heard to the petitioner, and to pass appropriate orders in accordance with law. The issue of latches raised by the respondent was not considered decisive in light of the procedural irregularity.

Facts

The petitioner, Sunrise Engineering, a proprietary concern registered under the GST Act and engaged in works contract, received a notice in Form ASMT-10 from the 2nd respondent on July 19, 2024, indicating discrepancies in its returns for the tax period 2023-2024. The petitioner replied on September 5, 2024, stating it had executed works for APSIDC, Vijayawada during 2018-19 and reported turnover without reference to TDS certificates, asserting no tax under-declaration. The petitioner also stated it was not doing business due to ill-health and reporting nil turnover from March 2024 onwards. Subsequently, the 2nd respondent issued intimation notice in Form DRC-01A on October 30, 2024, followed by a notice in Form DRC-01 on February 12, 2025, proposing a levy of tax of Rs. 3,85,523/-. Personal hearing notices were issued on March 17, 2025, and April 15, 2025. The 2nd respondent passed an assessment order on April 7, 2025, without response from the petitioner.

Key Issues

1. Whether the assessment order dated April 7, 2025, passed by the 2nd respondent is liable to be set aside for non-compliance with principles of natural justice, specifically for failing to provide an adequate opportunity of hearing to the petitioner? Petitioner's contentions: The petitioner argued that while portal notices were issued, the personal hearing notices dated March 17, 2025, and April 15, 2025, were neither uploaded on the portal nor sent through any other mode. Crucially, the assessment order was passed on April 7, 2025, which predates the second personal hearing notice dated April 15, 2025, thus denying the petitioner a proper opportunity of hearing. Screenshots from the GST portal were presented as evidence. Respondent's contentions: The learned Government Pleader argued that the writ petition is not maintainable due to latches, as it was filed on October 14, 2026, after the order under challenge was passed on April 7, 2025. It was also contended that the petitioner, having replied to the initial notice, failed to respond to the show cause notice, leading to the confirmation of the proposed assessment.