Background of the Case

The petitioner challenged a GST assessment order issued in Form GST DRC-07 for FY 2022-23 along with consequential recovery proceedings initiated through Form GST DRC-16. The dispute primarily related to levy of GST at the rate of 18% on works contract services executed for a State Government department. However, the petitioner questioned the very validity of the assessment order on the ground that the DRC-07 order dated 25.07.2023 did not bear the signature of the Proper Officer. The Revenue contended that the order had already been served by uploading it on the GST portal and that the writ petition had been filed with considerable delay. The matter was therefore placed before the Andhra Pradesh High Court to determine whether an unsigned assessment order could survive in law and whether the delay in approaching the Court would disentitle the petitioner from relief.

Arguments by the Appellant (Taxpayer)

The petitioner contended that the impugned DRC-07 order was void and unenforceable as it lacked the signature of the Proper Officer. Reliance was placed on earlier decisions of the Andhra Pradesh High Court, including A.V. Bhanoji Row, SRK Enterprises and SRS Traders, wherein the Court had consistently held that an assessment order without a valid signature is legally defective and cannot be sustained. The petitioner further submitted that the assessment order had not been served through conventional means and was merely uploaded on the GST portal. It was argued that the petitioner became aware of the proceedings only subsequently and therefore the delay in approaching the Court ought not to defeat a challenge against an order suffering from a patent legal defect.

Respondent’s Response (Revenue Department)

The Revenue opposed the writ petition on the ground of delay and submitted that the petitioner had failed to explain the prolonged period between issuance of the assessment order and filing of the writ petition. The department further argued that Section 169(1)(d) of the CGST Act specifically recognizes uploading of notices and orders on the GST portal as a valid mode of service upon a registered person. Accordingly, the department contended that the petitioner could not avoid the consequences of the assessment merely by claiming lack of knowledge of the order. The Revenue therefore sought dismissal of the writ petition while defending the validity of the assessment proceedings.

Court Findings and Decision

The Andhra Pradesh High Court held that the issue was squarely covered by its earlier judgments which had categorically ruled that the absence of the Proper Officer’s signature renders an assessment order invalid and that such a defect cannot be cured under Sections 160 or 169 of the GST Act. While the Court acknowledged the department’s objection regarding delay and recognized that uploading of orders on the GST portal is generally treated as a valid mode of service, it also took note of the practical difficulties faced by taxpayers under the GST regime and the recurring disputes relating to access and awareness of portal-based communications. Balancing the interests of both parties, the Court set aside the unsigned DRC-07 assessment order and remanded the matter to the Proper Officer for fresh adjudication after providing an opportunity of hearing to the petitioner. However, the relief was made subject to the condition that the petitioner deposits 20% of the disputed tax within six weeks. The Court further directed that the period during which the writ petition remained pending shall be excluded for limitation purposes and left all issues open for reconsideration by the Proper Officer.

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Background of the Case

The appellant, a registered taxpayer under the GST law, was subjected to search proceedings wherein its premises were raided and books of accounts were seized by the department. Subsequently, a show cause notice in Form GST DRC-01 dated 21.09.2023 was issued proposing action under Section 74 of the CGST/GGST Act. The petitioner duly filed a reply in Form DRC-06 on 21.11.2023 addressing the allegations raised in the notice. However, without granting any opportunity of personal hearing, the adjudicating authority proceeded to pass an adverse order dated 30.12.2023 under Section 74.

Aggrieved by such action, the petitioner approached the High Court contending violation of principles of natural justice and statutory mandate under Section 75(4) of the Act.

Arguments by the Appellant (Assessee)

The petitioner primarily contended that the impugned order was passed in complete violation of Section 75(4) of the GST Act, which mandates grant of opportunity of personal hearing before passing any adverse order. It was argued that despite filing a detailed reply to the show cause notice, no hearing opportunity was afforded, thereby rendering the order legally unsustainable. The petitioner emphasized that the requirement of personal hearing is not merely procedural but a substantive safeguard ensuring fair adjudication. It was further submitted that denial of such opportunity amounts to breach of principles of natural justice, particularly the doctrine of audi alteram partem, and hence the order deserved to be quashed.

Respondent’s Response (Revenue)

The Revenue defended its action by submitting that the petitioner, while filing reply in Form DRC-06, had opted “No” in the column relating to personal hearing, and therefore, no such opportunity was granted. It was argued that the adjudicating authority acted in accordance with the option exercised by the petitioner and there was no procedural lapse. However, the Revenue fairly acknowledged before the Court that Section 75(4) of the GST Act envisages grant of personal hearing opportunities, and the same were not provided in the present case. Despite this, the department attempted to justify that the petitioner’s own selection of “No hearing” disentitled it from claiming such opportunity.

Court Findings and Decision

The Hon’ble Gujarat High Court held that the statutory mandate under Section 75(4) of the GST Act cannot be overridden by any option selected by the assessee in Form DRC-06. The Court observed that it is incumbent upon the adjudicating authority to grant adequate opportunity of personal hearing before passing any adverse order, irrespective of such selection. Relying on settled principles of natural justice and earlier judicial precedents, the Court reiterated that fair hearing is a fundamental requirement and denial thereof vitiates the entire proceedings.

Accordingly, the impugned order was quashed and set aside, and the matter was remanded back to the adjudicating authority for fresh adjudication after granting proper opportunity of hearing within a stipulated time period.

To download official order, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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