(Per Hon’ble Mr. Justice Ahsanuddin Amanullah) The petitioner has filed the present writ petition for the following relief:

“….to issue an appropriate Writ Order or Direction more particularly in the nature of MANDAMUS holding that the impugned Order vide A.O.No.ZH3709210D89763, dated 27.09.2021 for the Tax Periods 2017-18 (07/2017 to 11/2017 and 01/2018) whereby he has disallowed the Input Tax Credit of ₹ 72,84,060-00 under the IGST Act, 2017 and further imposed Penalty equal to the said tax and interest @ 24% u/S. 50(3) that too from the relevant Tax Periods though the said tax and penalty were imposed for the first time under the impugned order in the facts and circumstances of the case, is arbitrary, without jurisdiction, without authority, contrary to law, violative of the principles of natural justice and illegal and consequently set aside the same and pass such other order…..”

2. The petitioner is manufacturer of steel articles and had purchased raw material from M/s. Samadani Traders, Bangalore, who had issued tax invoices and e-Way bills to the petitioner based on which he had also deposited 18% of tax as was required under the VAT Act to M/s. Samadani Traders through RTGS, for which, receipts were given to him. At the time of investigation, the tax payer Sri Fairoz Khan (M/s. Samadani Traders) has admitted that they had availed Input Tax Credit (ITC) on invoices without receipt of goods from entities who are dummy/fake. He further admitted that such irregular ITC was passed on to the petitioner. The Assessing Authority having been made aware of such situation informed the Joint Commissioner (ST), Commissioner of Central GST, Banglore, who in turn had directed the Special Commissioner (ST), for taking appropriate action and show cause notice was issued by the Assistant Commissioner (ST), Hindupur Circle, on 26.08.2021 in which opportunity of personal hearing was also indicated. The petitioner filed reply. The impugned Order of Assessment has been passed on 27.09.2021 directing the petitioner to pay the levied GST of ₹ 72,84,060/- and penalty of ₹ 72,84,060/- as also interest @ 24% of ₹ 67,25,415/-, the total being ₹ 2,12,93,535/-.

3. Learned counsel for the petitioner submitted that the said Assessment Order is absolutely illegal as far as the petitioner is concerned, since it has been passed ignoring the documents filed by the petitioner such as (1) Tax Invoices, (2) E-Sugam issued by the dealer for the transportation of goods, (3) Stock register maintained for purchases and issued for production, (4) Bank ledger for confirmation regarding payment made to the said Vendor dealer through RTGS, (5) Bank statements regarding confirmation of payments have been realized by the Vendor towards sales effected to the petitioner and (6) Form-2 regarding filing of GST returns by the Vendor. It was submitted that the petitioner had received invoices and vehicles from M/s. Samadani Traders which are not in dispute and he has discharged his liability by paying 18% GST on the goods purchased to M/s. Samadani Traders through RTGS. Thus, it was submitted that mere statement of M/s. Samadani Traders would not give rise to a situation where the petitioner can be held liable for any fraudulent transaction or evasion of tax so as to justify the imposition of IGST as also penalty and interest. It was submitted that though such issues were raised before the Assessing Authority and also the judgments of the Courts showing that in such a situation, the petitioner could not be liable, but without dealing with the issues or giving opportunity of examination/cross-examination of Fairoz Khan (M/s.Samadani Traders), the order has been passed. It was submitted that on the basis of the references cited in the impugned order, the Assistant Commissioner (ST), Hindupur Circle, has passed the impugned order which is more due to the direction issued by the superiors and without dealing with either the factual or legal issues raised by the petitioner. It was submitted that the Courts in various decisions have entertained the writ petition directly against the order passed by the Assessing Authority where there has been no consideration of the issues raised by the aggrieved person by the Assessing Authority.

4. Learned counsel submitted that present is a case where the Court may interfere without relegating the petitioner to the Appellate Authority as there has been gross violation of the principles of natural justice and total lack of consideration by the Assessing Authority. Further, it was submitted that the Appellate Authority being subordinate to the authority which had directed for taking appropriate action in the matter would not be fully independent in deciding the issue and it would be a mere formality by moving before him.

5. Learned Government Pleader, Commercial Tax, submitted that the apprehension expressed by the petitioner with regard to the Appellate Authority being guided by the direction to take action in the matter is misplaced for the reason that the direction was to take action based on what had factually emerged from the investigation against M/s. Samadani Traders. It was submitted that since the vendor of the petitioner admitted that it had received the invoices from its vendor and had passed on the same to the petitioner, without actually delivering any goods/materials, clearly a fraud was committed in the entire transaction and the petitioner cannot claim innocence. It was submitted that even otherwise the issues raised before this Court are based on facts which can be properly gone into at the level of the Appellate Authority where the documents and the witnesses may have to be summoned and examined. It was submitted that even otherwise, the issues which have been raised by the learned counsel for the petitioner before this Court with regard to the opportunity of cross-examining any person, no such plea was raised before the Assessing Authority and upon show cause, he had appeared and participated in the proceeding and thereafter the impugned order has been passed. Thus, it was submitted that if at all the petitioner has any doubt or grievance with regard to any materials/statements which have been produced on behalf of the department, based on which the Assessment Order has been passed, all such issues have to be raised before the Appellate Authority and the authority would be required to take decision thereon. It was submitted that in such background, the Court in its extraordinary prerogative jurisdiction under Article 226 of Constitution of India may not be fully equipped to go into such aspects which are primarily based on facts which are also not admitted and have to be proved by the parties concerned in accordance with law.

6. Having considered the facts and circumstances of the case and submissions of learned counsel for the parties, this Court finds force in the submission of learned Government Pleader, Commercial Tax. Though learned counsel for the petitioner has raised issues which require consideration, but since the same are based on facts which are still not admitted or proved, the exercise has to be gone into initially with regard to the factual aspect of the matter and thereafter only the law can be applied once such factual aspects are clear before the concerned authority or the Court.

7. In such view of the matter, this Court also feels that the matter can better be appreciated and gone into by the Appellate Authority which would be in a position to take a view with regard to issues raised by the petitioner in accordance with law after giving full opportunity of hearing to the petitioner.

8. For reasons aforesaid, this Court is not inclined to entertain the writ petition for the present.

9. Accordingly, the Writ Petition stands disposed of with liberty to the petitioner to move before the Appellate Authority, who shall consider all the points and issues raised by the petitioner and also give opportunity of hearing to him and then pass reasoned order dealing with all the issues and points raised by the petitioner, both on facts as well as in law.

10. Before parting, the Court would observe that it has not expressed any opinion on the merits of the matter which is left for the Appellate Authority to go into. It is further observed that the Appellate Authority shall not be influenced or prejudiced by any observation of any superior authority and shall apply its independent mind based on the materials placed before it by the parties. No order as to costs.

11. Miscellaneous petitions, if any pending also stand disposed of.