Demand Order Invalid Without Adequate Time for Document Collection Post GST Registration Cancellation
The Hon’ble Andhra Pradesh High Court, in Avexa Corporation (P.) Ltd. Vs State of Andhra Pradesh [W.P. 10094/2024, dated August 19, 2024], ruled that a demand order issued without granting the Assessee sufficient time to collect documents after the revocation of GST registration is invalid.
Case Summary
The Assessee’s GST registration was canceled, which significantly disrupted their ability to gather the necessary compliance records. Subsequently, when the registration was restored, the Department immediately issued a demand order. However, the Assessee argued that this violated the principles of natural justice, as they had no reasonable opportunity to collect and submit the required documents.
Court’s Observations
- Violation of Natural Justice
The Court pointed out that the Assessee was not given enough time to gather and present relevant documents. As a result, this omission clearly breached the principles of natural justice. - Unfair Procedural Timeline
Furthermore, the Court noted that issuing a demand order immediately after revoking GST registration deprived the Assessee of a fair chance to respond effectively. - Order Declared Invalid
Consequently, the Court set aside the demand order and directed the Department to provide the Assessee with reasonable time for submitting documents and responding to notices.
Implications for Taxpayers
This judgment highlights the critical need for procedural fairness in GST-related matters. Therefore, tax authorities must ensure that taxpayers are given sufficient time to comply with documentation requirements, especially after restoring GST registrations.
Key Takeaway
Taxpayers in similar situations can rely on this judgment to safeguard their rights. Moreover, it reinforces that compliance processes should be conducted fairly and transparently.
