Consolidated Appeal Allowed Against Single SCN/Order for Multiple Financial Years

Consolidated Appeal Allowed Against Single SCN/Order for Multiple Financial Years

Issue:

Whether an assessee, who has received a single show cause notice (SCN) and a common adjudication order covering demands for multiple financial years, can file one consolidated appeal before the Appellate Authority under Section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act), or if they are compelled to file separate appeals for each financial year.

Facts:

For the period 2017-18 to 2019-20, a show cause notice (SCN) was issued to the assessee, alleging wrongful availment of Input Tax Credit (ITC) through the issuance of goods-less invoices. The assessee duly replied to this SCN, and subsequently, a single impugned order was passed creating a demand against the assessee. The assessee submitted that since the SCN covered three financial years and a common impugned order had been passed, they should not be compelled to file three separate appeals. They sought permission to file one consolidated appeal. It was also noted that only Financial Year 2017-18 was specifically mentioned in the impugned order, suggesting a potential ambiguity.

Decision:

The court ruled in favor of the assessee. It held that, considering it was a common SCN and a common impugned order had been passed (even if only Financial Year 2017-18 was explicitly mentioned in respect of the impugned order), the assessee should be permitted to file one consolidated appeal before the Appellate Authority under Section 107.

Key Takeaways:

• Practicality Over Technicality: This decision prioritizes practicality and avoids undue procedural burden on the assessee. When the underlying SCN and adjudication order are common for multiple periods, forcing separate appeals would be an unnecessary technicality.
• Common Cause of Action: The core issue (wrongful ITC availment via goods-less invoices) and the common SCN/order create a single cause of action, making a consolidated appeal logical.
• Facilitating Appellate Process: Allowing a consolidated appeal streamlines the appellate process for both the assessee and the Appellate Authority, avoiding redundant filings and separate hearings for essentially the same dispute.
• Interpretation of “Impugned Order”: Even if the order mentions only one financial year (2017-18), the fact that the SCN covered all three years and a “common impugned order” was passed implies that the order intended to address all periods covered by the SCN.
• In Favour of Assessee: The ruling is in favor of the assessee as it simplifies their appellate compliance and potentially reduces the cost and effort associated with multiple appeals.