The court emphasized the importance of adhering to principles of natural justice in tax assessment proceedings, highlighting the requirement for the assessing authority to furnish crucial material to the taxpayer for a fair hearing.

ORDER :

C.PRAVEEN KUMAR, J.

Heard Sri Bhaskar Reddy Vemireddy, learned counsel for the petitioner, and Sri Y.N.Vivekananda, learned Government Pleader for Commercial Tax appearing for respondent Nos.1 to 4, and perused the record. With their consent, this Writ Petition is disposed of at the stage of admission.

2. The present Writ Petition came to be filed under Article 226 of the Constitution of India seeking the following relief:-

“…… to issue an appropriate writ or order or direction more particularly one in the nature of Writ of Mandamus

i) declaring the action of the 2nd respondent in provisionally attaching the petitioner’s properties through the impugned proceedings in Form GST DRC 22 dated 7.5.2022 as illegal, arbitrary, high handed, without authority of law and jurisdiction and contrary to the provisions of the Act,

ii) declare that the impugned order passed by the 1st respondent in Form DRC-07 dated 20.6.2022 as illegal, arbitrary, high handed, without authority of law and jurisdiction, contrary to the provisions of the CGST/SGST Act, 2017 and in violation of principles of natural justice and set aside the same and pass ……”

3. As seen from the record, the petitioner has been regularly filing returns and paying resultant tax in terms of Section 16 of the Central Goods and Services Tax Act, 2017/the State Goods and Services Tax Act, 2017. It is submitted that respondent No.1, in pursuance of inspection conducted in the business premises of the petitioner, issued notice in GST DRC-01A, dated 31.01.2022, ascertaining an amount of Rs.11,15,41,133/- towards the tax payable by the petitioner. Detailed objections came to be filed requesting respondent No.1 to drop the proposed action. Instead of considering the objections and the elaborate documentary evidence filed by the petitioner, respondent No.1 issued notice in GST DRC-01, dated 07.04.2022, demanding an amount of Rs.22,58,49,854/-, which includes 100% penalty and interest under Section 50 of CGST/SGST Act. The petitioner once again submitted his explanation to the said notice along with the material. However, revised notice in GST DRC-01, dated 30.05.2022, came to be issued by respondent No.1 demanding Rs.28,00,20,392/-. A reading of the order indicates that the said figures have been arrived at by respondent No.1, mainly on the ground that the petitioner failed to produce original tax invoices for the entire turnover but instead placed on record xerox copies of invoices for part of the turnover. It was further held that some of the dealers, from whom the petitioner has purchased the goods, are not existing/fictitious. Enquiries with the toll gate authorities revealed that some of the vehicles did not pass through the said toll gates at Chittoor. It was also held that some of the owners of the vehicles, denied hiring of the vehicles to the petitioner for transport of the goods and information in respect of some of the vehicles is not available on the transport website.

It is also submitted that in response to the revised notice in GST DRC-01 dated 30.05.2022, the petitioner filed a letter dated 10.06.2022 seeking 15 days’ time to file objections explaining the circumstances as to why he needs some time to file reply. Though the said letter was said to have been acknowledged by respondent No.1, there was no response from him either rejecting or restricting the time sought for by the petitioner. But the impugned order in Form GST DRC-07, dated 20.06.2022, came to be passed stating that the petitioner herein did not respond to the revised notice issued in GST DRC-01, dated 30.05.2022.

It is also to be noted here that respondent No.2 provisionally attached the bank account of the petitioner under Section 83 of the A.P.GST Act vide order, dated 07.05.2022. Challenging the same, the present writ petition is filed.

4. Reiterating the averments in the affidavit filed in support of the writ petition, Sri Bhaskar Reddy Vemireddy, learned counsel for the petitioner, would contend that the