Multiple Show Cause Notices for the Same Period Under GST can be issued if they address different subject matters.
Summary in Key Points:
- Issue: Whether the GST authorities can issue multiple show cause notices (SCNs) to an assessee for the same period, covering different issues.
- Facts: The assessee received two SCNs for the same period. The first SCN alleged discrepancies in the assessee’s Input Tax Credit (ITC) claims for taxable and exempted supplies, while the second SCN alleged misclassification of a product as exempted goods. The assessee challenged the validity of issuing two SCNs for the same period.
- Decision: The High Court held that issuing two SCNs for the same period is permissible if they address different subject matters.
Decision:
The High Court ruled in favor of the revenue department, stating that there is no legal bar on issuing multiple SCNs for the same period if they cover distinct issues. The court clarified that the two SCNs issued to the assessee dealt with different subject matters:
- First SCN: Dealt with discrepancies in ITC claims for taxable and exempted supplies.
- Second SCN: Dealt with misclassification of a product as exempted goods.
Since the SCNs addressed separate issues, the court found no reason to interfere with the issuance of the second SCN.
Important Note: This case clarifies that multiple SCNs can be issued for the same period under GST, provided they address distinct and separate issues. This allows the tax authorities to address different aspects of non-compliance or potential tax evasion through separate proceedings, ensuring a comprehensive and thorough investigation.
HIGH COURT OF ALLAHABAD
ALM Industries Ltd.
v.
Assistant Commissioner (AE) Central goods and services
Arun Bhansali, CJ.
and Vikas Budhwar, J.
and Vikas Budhwar, J.
WRIT TAX No. – 2505 of 2024
JANUARY 10, 2025
Aditya Pandey for the Petitioner. Parv Agarwal for the Respondent.
ORDER
1. This petition has been filed by the petitioner aggrieved of the notice dated 4.8.2024 issued by respondent no.2/3.
2. Submissions have been made that the petitioner was issued show cause notice dated 30.07.2024 by the Assistant Commissioner (AE), CGST, Meerut in relation to the availment of ITC for effecting taxable as well as exempted supply wherein no separate record was allegedly maintained by the petitioner. However, subsequent thereto, impugned notice dated 04.08.2024 has been issued to the petitioner in relation to mis-classifying the product as in exempted goods instead of taxable at the rate of 5%.
3. Submissions have been made that the respondents are not justified in issuing two notices for the same period and, therefore, the issuance of subsequent notice deserves to be set aside.
4. Counsel for the respondents indicated that admittedly, the subject matters of both the show cause notices are totally different and independent to each other and there is no bar in law in issuing more than one show cause notice for the same period on different subject matters. It has been further indicated that in the show cause notice dated 30.07.2024 issued to the petitioner, the fact that issue pertaining to applicability of tax on supply of poultry feed supplements which were cleared by the petitioner as exempted supply, has already been taken up by the DGGI-HQ, New Delhi and, therefore, the said aspect was not being taken into consideration, was specifically noticed and in those circumstances, the issuance of notice dated 04.08.2024 cannot be questioned.
5. Learned counsel for the petitioner attempted to make submissions that for the same period, the petitioner would be required to appear before the different authorities, which will be cumbersome and may lead to contrary findings.
6. We have considered the submissions made by learned counsel for the parties and have perused the material available on record.
7. A bare perusal of the show cause notices issued to the petitioner reveals that the subject matter of both the notices is totally different from each other and, therefore, apparently there is no bar in law in issuing two show cause notices for the same period with a different/distinct subject matter and, therefore, to that extent, no interference to the show cause notice is made out.
8. So far as the plea pertaining to two show cause notices being adjudicated by two different authorities is concerned, the petitioner would be free to approach the said authorities and, in case, petitioner approaches the said authorities, the authority would take a view on the subject and examine viability of both the show cause notices being adjudicated by the same authority.
9. With the above observations, the petition stands disposed of.