The Andhra Pradesh High Court has held that Opportunity of hearing to be given if AO contemplates an adverse decision.
The bench of Justice R Raghunandan Rao and Justice Harinath.N has observed that Section-67 of the CGST Act, 2017 requires previous authorization from the competent authority before any officer of the tax department can inspect the premises of the dealer or conduct an audit of the accounts of a dealer.
The petitioner/assessee is carrying on lorry transport business. The premises of the petitioner were inspected by the department on 07.11.2019. At that time the petitioner was not a registered dealer under the Andhra Pradesh Goods and Service Tax Act, 2017.
A show-cause notice was issued, on the basis of the inspection. This notice was received by the petitioner on 26.12.2019, after receipt of this notice, the petitioner had submitted a letter, dated 04.01.2020, seeking time to file objections. The letter was received by the 1st respondent on 21.01.2020. Thereafter, an order of assessment was passed on 21.09.2020. Apart from this, an order of penalty was passed on 09.11.2020. It appears that the petitioner had filed objections to the assessment, in October-2020, after the order of assessment had been passed.
The petitioner challenged the order of assessment and the penalty order.
The assessee contended that the provisions of the CGST Act, 2017 require the inspecting officer to have previous authorization from the competent authority under Section-67 of the CGST Act, 2017. Apart from this, a separate authorization has to be given for the said inspecting officer to take up assessment proceedings, if the said officer is not the proper officer under the provisions of the CGST Act, 2017. Here, a proper officer would be the territorial assessing authority. In the present case, the 1st respondent was the Assistant Commissioner (ST), Addanki Circle, whereas, the petitioner is presently being assessed by the Assistant Commissioner, Ongole-1 and as such, the 1st respondent ought to have obtained the previous authorization before passing any assessment order. No such authorization has been placed before this Court and consequently, the assessment order and the consequential penalty order would have to be set aside.
The department contended that Section-67 of the CGST Act, 2017 stipulates that no inspection of any dealer can be carried out unless the previous authorization is obtained from the Joint Commissioner or the Commissioner. In the present case, such previous authorization was obtained on 05.11.2019 and this an admitted fact. There is no provision for obtaining authorization for connecting assessment proceedings arising out of such inspection, if the assessing authority is the usual territorial assessing authority of such a dealer. In the present case, the petitioner was an un-registered dealer and an assessment of such un-registered dealer is to be carried out under Section-63 of the CGST Act, 2017. There is no provision in Section-63 of the CGST Act, 2017 for requiring any previous authorization.
The court disposed of the Writ Petitions by setting aside the assessment orderas well as the penalty order while leaving it open to the department to undertake a fresh assessment proceeding and consequential proceeding, if any, after giving an opportunity of personal hearing to the petitioner.
Case Details
Case Title: Sri Srinivasa Lorry Transport Versus Assistant Commissioner
Case No.: Writ Petition No: 5385 & 5456 Of 2021
Date: 11/09/2024
Counsel For Petitioner: Shaik Jeelani Basha
Counsel For Respondent: Addl Advocate General II
