M/s M.R. Metals VS Deputy Commissioner GST

The petitioner in this case has a history of consistently filing returns and paying taxes as required by the Central Goods and Services Tax Act, 2017, or the State Goods and Services Tax Act, 2017. However, an issue arose when respondent No.1 conducted an inspection at the petitioner’s business premises and subsequently issued a notice (GST DRC-01A) on January 31, 2022, stating an amount of Rs. 11,15,41,133/- as the tax payable by the petitioner.

In response, the petitioner submitted detailed objections, urging respondent No.1 to drop the proposed action. Despite the submission of objections and supporting documentary evidence, respondent No.1 proceeded to issue another notice (GST DRC-01) on April 7, 2022, demanding an increased amount of Rs. 22,58,49,854/-, which included 100% penalty and interest under Section 50 of the CGST/SGST Act.

Once again, the petitioner submitted an explanation along with relevant material to challenge this notice. However, respondent No.1 issued a revised notice (GST DRC-01) on May 30, 2022, demanding an even higher amount of Rs. 28,00,20,392/-.

The crux of the matter lies in respondent No.1’s calculation of these figures, primarily attributing the increase to the petitioner’s alleged failure to produce original tax invoices. Despite the petitioner’s efforts to provide explanations and supporting documents, respondent No.1 has persistently escalated the demanded amount without due consideration of the petitioner’s submissions.

This sequence of events highlights the petitioner’s diligent compliance with tax regulations contrasted with the seemingly arbitrary and escalating demands by respondent No.1. The petitioner’s pleas for fairness and proper consideration of evidence have so far been disregarded, raising concerns about procedural justice and the reasonableness of the tax assessment process.

The petitioner in this case has a history of regularly filing tax returns and paying taxes as per the Central Goods and Services Tax Act, 2017, or the State Goods and Services Tax Act, 2017. However, an inspection conducted by respondent No.1 at the petitioner’s business premises led to the issuance of a notice in GST DRC-01A on January 31, 2022, determining a tax amount of Rs. 11,15,41,133/- to be paid by the petitioner. The petitioner submitted detailed objections, requesting respondent No.1 to drop the proposed action. Despite the submission of objections and documentary evidence, respondent No.1 issued another notice in GST DRC-01 on April 7, 2022, demanding an increased amount of Rs. 22,58,49,854/-, which included a 100% penalty and interest under Section 50 of CGST/SGST Act.

The petitioner once again provided an explanation and material in response to this notice. However, a revised notice in GST DRC-01, dated May 30, 2022, was issued by respondent No.1, demanding Rs. 28,00,20,392/-. This increase in the demanded amount was primarily based on the petitioner’s alleged failure to produce original tax invoices for the entire turnover, instead providing xerox copies for part of the turnover. It was also claimed that some of the dealers from whom the petitioner purchased goods were non-existent or fictitious.

Further investigations revealed discrepancies, such as vehicles allegedly not passing through toll gates as claimed by the petitioner and owners of vehicles denying any association with transporting goods for the petitioner. Additionally, information about some vehicles was not available on transport websites.

In response to the revised notice dated May 30, 2022, the petitioner requested 15 days’ time to file objections, explaining the need for additional time. While this request was acknowledged by respondent No.1, there was no formal response either accepting or denying the requested time extension. Nevertheless, an order in Form GST DRC-07 was passed on June 20, 2022, stating that the petitioner had not responded to the revised notice issued on May 30, 2022.

This summary outlines the petitioner’s consistent filing of returns and tax payments, the issuance of multiple notices by respondent No.1 demanding increasing amounts, allegations of discrepancies in invoices and transactions, and the petitioner’s attempts to provide explanations and objections throughout the process.

The petitioner in this case has a history of diligently filing returns and paying taxes under the Central Goods and Services Tax Act, 2017/the State Goods and Services Tax Act, 2017. However, a notice was issued by respondent No.1 following an inspection of the petitioner’s business premises, claiming a substantial amount as tax payable. Despite detailed objections and documentary evidence submitted by the petitioner, respondent No.1 proceeded to issue successive notices demanding even larger sums, citing reasons such as the failure to produce original tax invoices for the entire turnover and alleging the existence of fictitious suppliers.

In response to the revised notice dated 30.05.2022, the petitioner requested 15 days’ time to file objections, but received no response from respondent No.1. Nevertheless, an order was passed on 20.06.2022 stating that the petitioner had not responded to the notice. Additionally, respondent No.2 provisionally attached the petitioner’s bank account under Section 83 of the A.P.GST Act.

In challenging these actions, the petitioner argues that the assessment order is flawed as the assessing authority did not provide the necessary material for the petitioner to respond adequately. Furthermore, the provisional attachment order is contested on the grounds that the Joint Commissioner lacked the authority to issue it and that the petitioner’s explanation was not recorded prior to its issuance.

The government pleader for commercial tax, representing respondent Nos.1 to 4, opposes these arguments, asserting the validity of the actions taken. However, the petitioner maintains that due process was not followed and that the orders issued are legally unsound.

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