Assessment Order Passed Before Expiry Of Time To File Reply Is Liable To Be Set Aside: Kerala High Court

The Kerala High Court stated that any assessment order issued before the time allowed for filing a reply has no legal validity and can be overturned.

The Bench of Justice Gopinath P. observed that “…….the assessee had filed an appeal against the order is no ground to refuse relief to the assessee as the original order was clearly issued in violation of principles of natural justice…….”

In this case, a show cause notice dated June 20, 2023, granted the assessee until July 21, 2023, to file a reply. However, an assessment order was issued on July 11, 2023, prior to the expiration of the allotted time for the assessee to respond.

The assessee has filed a writ petition challenging the assessment order issued under the provisions of Section 73 of the CGST/SGST Acts.

The department submitted that the assessee has already availed the remedy of filing an appeal against the order, claiming the benefit of the notification (issued in the matter of limitation for filing appeals), which clearly, on its terms, was not applicable to the assessee. It was submitted that, the appeal filed by the assessee was also rejected by another order finding that it was barred by limitation.

The bench noted that though the assessee may have filed an appeal against the assessment order (which was rejected by another order as being time barred), the fact remains that another order was passed in violation of principles of natural justice.

Further, the bench stated that “……..it is clear from show cause notice that the assessee was given time till 21.07.2023 to reply to the show cause notice. The order appears to have been passed on 11.07.2023, even before the time for filing a reply had expired. Therefore, the order is liable to be set aside………..”

The fact that the assessee had filed an appeal against the assessment order is no ground to refuse relief to the assessee as the order was clearly issued in violation of principles of natural justice, added the bench.

In view of the above, the bench allowed the petition and set aside the assessment order.

Counsel for Petitioner/ Assessee: Padmanathan K.V. and R. Sreejith

Counsel for Respondent/ Department: Dayasindhu Shreehari N.S. and Jasmin M.M

Case Title: Elsy Joy v. The Deputy Commissioner Of State Tax

Case Number: WP(C) NO. 35393 OF 2024

Citation: 2024 LiveLaw (Ker) 682

Click Here To Read/Download Order