Notice Under Rule 142(1)(A) Of CGST Rules Must Be Issued Before Issuing Proper SCN: Andhra Pradesh High Court

The Division Bench of Justices R. Raghunandan Rao and K Manmadha Rao was addressing a case where notice under Rule-142(1)(A) of the CGST Rules was not issued to the assessees/petitioners, prior to the Orders of assessment.

The assessees have challenged the orders of assessment before the Andhra Pradesh High Court.

The assessee submitted that a preliminary notice under Rule-142(1)(A) of the Central Goods and Services Tax Rules, 2017 would have to be issued before a proper show-cause notice and subsequent Order of assessment can be issued.

It was further submitted that the said requirement is a mandatory requirement and any failure to adhere to such a requirement would render the Orders of assessment invalid.

The bench observed that Rule-142(1)(A) of the CGST Rules, was amended with effect from 15.10.2020. Prior to the amendment, the Rules stated that a notice under Rule-142(1)(A) of the CGST Rules “shall” be issued as a preliminary step for conduct of an assessment proceeding. The word “shall” was replaced with a word “may” by virtue of the amendment.

The bench referred to the case of M/s. New Morning Star Travels v. The Deputy Commissioner (ST), Vijayawada [W.P.No.12850 of 2022], where it was held that non issuance of Rule-142(1)(A) of the CGST Rules, for the period prior to the amendment, would render the Orders of assessment is invalid.

The bench opined that as all the assessments are prior to the amendment, the ratio of the New Morning Star Travels (supra) would squarely apply to these cases.

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

Case Title: Sri Durga Granites v. The Deputy Assistant Commissioner and Others

Case Number: W.P.Nos.3480 & 6504 of 2020

Counsel for Petitioner/ Assessee: G Narendra Chetty

Click Here To Read/Download The Order