M.R. Metals v. Deputy Commissioner (ST), Joint Commissioner (ST), Chief Commissioner of State Tax (Int.)
High Court of Andhra Pradesh
Writ Petition No. 31148 of 2022
Category: Provisional Attachment, Principles of Natural Justice
Date of Judgment: 29 September 2022
Relevant Sections: Sections 50, 83, 73 of CGST/SGST Acts, 2017
Facts of the Case
[Para 3] The petitioner, M.R. Metals, regularly filed returns and paid tax under Section 16 of the CGST/SGST Act. Pursuant to an inspection, respondent authorities issued notice in Form GST DRC-01A proposing tax dues of ₹11.15 crores. Despite objections and documentary evidence submitted by the petitioner, a revised demand in DRC-01 was issued escalating dues to ₹28.00 crores, alleging that invoices were not original, and that some dealers were fictitious. Toll gate data and vehicle owner statements were also cited.
[Para 3] The petitioner requested additional time to respond to the DRC-01 (dated 30-5-2022) but received no response. Instead, respondent passed a final assessment order (Form GST DRC-07) dated 20-6-2022, ignoring the time extension request.
[Para 3] Simultaneously, the Joint Commissioner provisionally attached the petitioner’s bank account via Form GST DRC-22 dated 7-5-2022, invoking Section 83.
Question(s) in Consideration
[Para 2]
- Whether the assessment order passed without providing relied-upon material to the petitioner violates principles of natural justice.
- Whether the provisional attachment order passed by the Joint Commissioner under Section 83 is valid in law, especially in absence of recorded reasons or power to do so.
Observations of the Court
[Para 6] The assessing authority relied on materials (like invoice authenticity, dealer existence, toll data) without furnishing them to the petitioner, violating natural justice. Names of dealers, toll gates, vehicle owners, and related evidence were not disclosed.
[Para 6] The petitioner was not given adequate opportunity to reply as his request for time extension was not responded to.
[Para 4] Regarding provisional attachment, it was held that the Joint Commissioner may not be competent to issue such orders under Section 83, and the absence of reasons recorded also undermined its validity.
Judgment of the Court
[Para 7] The assessment order dated 20-6-2022 (Form DRC-07) is quashed. The case is remanded to the assessing officer for fresh adjudication, post-supply of relied-upon documents, with full opportunity for hearing.
[Para 8] The provisional attachment order dated 7-5-2022 (Form DRC-22) is also set aside. However, liberty is granted to initiate a fresh attachment process, if necessary, in accordance with Section 83.
[Para 9] The writ petition is allowed. No costs were awarded.
Between Fine Lines
- Authorities must share all materials relied upon for tax assessments.
- Non-furnishing of such data violates natural justice.
- Provisional attachment under Section 83 must be reasoned and within the competence of the issuing officer.
- Procedural fairness, including hearing opportunity, is vital in GST assessments.
- Orders passed without adherence to due process are liable to be set aside.
Summary of Referred Cases
| Name of Case | Citation | Summary | Verdict |
| None cited explicitly in judgment | – | – | – |
Takeaway
“Assessment by Ambush: Denial of Material Leads to Nullification”