Revolutionary Raja for Taxation & Economic Reform

Revolutionary Raja for Taxation & Economic Reform Writer & Author of 12 books. Columnist, Economist, Radio & TV Debate panelist!! Founder of www.GSTpanacea.com.

Business Consultant specially for Starts-Up & MSME. Views shared here are personal views & might be against any government or political party!

29/12/2024

Can an application for rectification under Section 161 of the GST Laws be rejected without a personal hearing?

Recent judicial guidance highlights that even a seemingly minor procedure requires adherence to principles of natural justice.

In Orissa Stevedores Ltd. vs Deputy Commissioner of CT and GST, the Orissa High Court quashed an order rejecting a rectification application—issued without any reasoning or personal hearing—and restored the application for fresh consideration. The Department’s argument that no hearing is necessary and that the petitioner could simply appeal was not accepted.

Key Points
• A rectification request was submitted.
• The Department rejected it without providing reasons or an opportunity to be heard.
• The High Court held that such a rejection qualifies as an “adverse order” and must follow the principles of natural justice, including providing reasons and a hearing.

This decision reaffirms that rectification orders under GST law cannot be treated lightly. Proper reasoning and fair procedure are mandatory before issuing any adverse order.

Reference:

Orissa Stevedores Ltd. vs Deputy Commissioner of CT and GST
Orissa High Court | W.P.(C) No. 13696 of 2024 | Dated: 07-Aug-2024

Title: Latha Steel Suppliers V. Assistant Commissioner of GST Court: Calcutta High Court Date:- 06 Aug, 2024Citation no...
27/12/2024

Title: Latha Steel Suppliers V. Assistant Commissioner of GST
Court: Calcutta High Court
Date:- 06 Aug, 2024
Citation no : W. P. NO. 21450 OF 2024 AND W. M. P. NOS. 23416 0
23418 OF 2024.

Title: GCCI Calls for Streamlined GST Registration ProcessThe Gujarat Chamber of Commerce and Industry (GCCI) has recent...
17/12/2024

Title: GCCI Calls for Streamlined GST Registration Process

The Gujarat Chamber of Commerce and Industry (GCCI) has recently pushed for a more efficient GST registration process by advocating for a clear Standard Operating Procedure (SOP). This call to action comes from a need to balance stringent checks against fraudulent activities while ensuring that genuine businesses do not face undue bureaucratic obstacles.

Understanding the Need for SOP

In their latest representation to both state and central GST departments, GCCI highlighted the issues businesses are encountering during the GST registration phase. Deep Thakkar, a chartered accountant and co-chairman of the GCCI indirect tax committee, emphasized the dual importance of verification and ease of access. He stated, "We understand that checks and balances in availing registration under the GST Acts are important tools to w**d out fake entities. However, it is equally necessary that these very checks and balances should not lead to unnecessary hassles for genuine taxpayers."

Challenges Faced by Businesses

One of the major issues raised was the demand for documents that are not readily available or easy to produce for many businesses. The GCCI's representation underscored the need for a definitive list of documents required for GST registration, which would streamline the process and reduce ambiguity.

Biometric Verification Hurdles

Another significant concern is the process of biometric verification. Currently, this service is available in only thirteen states, leading to logistical issues for those needing to register outside these states. Thakkar explained, "If any applicant from another state wants to register for GST in Gujarat, they would be assigned a biometric session. The person concerned will have to travel to Gujarat for the session."

This travel requirement poses both an inconvenience and an additional cost to businesses not based in Gujarat. GCCI's solution to this problem involves advocating for a system where biometric authentication can be conducted at any GST Seva Kendra across India. "As the biometric authentication system is being rolled out in a phased manner across India, it is suggested that there should be real-time coordination between all states, and data sharing must be enabled. In line with this, such a person should be permitted to undertake biometric authentication at the GST seva kendra of their state rather than travelling to Gujarat," GCCI demanded.

The Path Forward

The demand for an SOP and a more flexible biometric verification process aims to foster an environment where businesses can thrive without being bogged down by complex administrative procedures. By focusing on these reforms, GCCI hopes to contribute to a more business-friendly regulatory framework under the GST regime.

As we move forward, the implementation of these suggestions could significantly enhance the ease of doing business in India, particularly for those looking to expand or establish operations across state lines. It's a step towards ensuring that India's tax system supports rather than hinders economic growth and entrepreneurial spirit.

13/12/2024

13-Dec-2024 Today's :
=> GSTR-6 for the m/o Nov 2024

=>IFF for the m/o Nov 2024 (QRMP Taxpayers). This is optional

=> GSTR-5 for the m/o Nov 2024 [Return by Non-Resident Taxpayers]

Title: Commissioner of Income tax v. Devata Tradelink Ltd.Court: Delhi High court Date:- 22 Nov, 2023Citation No.: IT Ap...
12/12/2024

Title: Commissioner of Income tax v. Devata Tradelink Ltd.
Court: Delhi High court
Date:- 22 Nov, 2023
Citation No.: IT Appeal no. 163 of 2018

09/12/2024

The principles of Certainty, Clarity, and Stability demand that the law be certain, just, and move with time.

Supreme Court in Union of India vs Raghubir Singh (1989) 2 SCC 754 :: (1989) 178 ITR 548 :: (1989) 74 STC 313 :: AIR 1989 SC 1933

Q. What is the principle of certainty and fairness?

A. The principle of certainty and fairness is a foundational concept in legal and regulatory frameworks, ensuring that individuals and entities can understand, predict, and rely upon the rules that govern their conduct. Under the principle of certainty, laws and regulations are expected to be clear, unambiguous, and consistently applied so that those subject to them can accurately anticipate legal consequences.

Note: This post has no link with GST.

04/12/2024

Friends,

जब मैं अपनी Top Leadership को surrender करते देखता हूँ तो बहुत दर्द होता है !

आज आपके पास मौका है इसको बदलने का !

इस Profession को अब Elected Representatives नहीं Leaders की जरुरत है ! एक ऐसे Leader की जरुरत है जो की अपने memeber के साथ हर मुसीबत में खड़ा रहे !!

बात समझ आये तो खुद से support करना , वर्ना जैसा चल रहा है , चल तो रहा ही है !

CA. Raja Abhishek
Ballot # 25 for NIRC

04/12/2024

Notice/Order Under Section 74 Cannot Be Initiated Once Proceedings Under Section 61 Are Dropped: Punjab and Haryana High Court

The Punjab and Haryana High Court has clarified an important legal principle under the GST regime, ruling that proceedings under Section 74 of the CGST Act, 2017, cannot be initiated once the proceedings under Section 61 have been dropped. This landmark judgment, in the case of *M/s J.S.B. Trading Co. vs State of Punjab*, underscores the principle of non-contradiction in tax administration and procedural fairness. Here’s a detailed analysis of the case and its implications.

Case Overview
Case Title: M/s J.S.B. Trading Co. vs State of Punjab
Court: Punjab and Haryana High Court
Date: 04-Nov-2024
Citation: CWP-14843-2023 (O&M)
Other Citations: 2024-VIL-1190-P&H :: 2024-TIOL-1936-P&H-GST

Key Issues:
1. Whether proceedings under Section 74 of the CGST Act could be initiated after proceedings under Section 61 were dropped.
2. Whether the order passed under Section 74 complied with the principles of natural justice, particularly the mandatory requirement of providing an opportunity for a personal hearing under Section 75(4).

Factual Background
- The petitioner, M/s J.S.B. Trading Co., claimed Input Tax Credit (ITC) on purchases from certain firms whose registrations had been cancelled.
- The GST Department scrutinized the petitioner’s returns under Section 61 and issued a notice seeking clarifications.
- The petitioner provided satisfactory replies, and the proceedings under Section 61 were dropped, with no further action deemed necessary.
- Subsequently, the Department issued a notice under Section 74 for the same reasons and passed an order imposing penalty and interest.

Court’s Findings and Decision
1. Contradiction in Proceedings:
- The Court held that once proceedings under Section 61 were dropped, the initiation of proceedings under Section 74 for the same issues was contradictory and impermissible in law.
- Section 61 scrutiny is meant to resolve discrepancies or errors in returns, and its conclusion implies that the issues have been satisfactorily addressed. Revisiting these under Section 74 undermines procedural certainty.

2. Violation of Principles of Natural Justice:
- Section 75(4) of the CGST Act mandates that an opportunity for personal hearing must be provided before passing an order under Section 74.
- The Court noted that this mandatory provision was not complied with, further vitiating the proceedings.

Judgment:
- The notice issued under Section 74(1) and the subsequent order passed were quashed and set aside.
- The Court allowed the petitioner’s writ petition, reiterating the mandatory compliance with procedural safeguards under the CGST Act.

Implications of the Judgment

1. **Legal Clarity:**
This judgment reinforces the principle that tax authorities must not contradict their own findings and decisions. Once a proceeding under Section 61 is dropped, initiating a fresh proceeding under Section 74 on identical grounds is legally unsustainable.

2. **Adherence to Natural Justice:**
The decision highlights the mandatory nature of procedural safeguards, including the right to a personal hearing under Section 75(4), which cannot be bypassed.

3. **Protection for Taxpayers:**
Taxpayers now have a precedent to rely on in cases where contradictory proceedings are initiated or procedural fairness is compromised.

---

**Conclusion**
This judgment by the Punjab and Haryana High Court serves as a critical reminder of the importance of procedural integrity in GST administration. Taxpayers facing similar issues can leverage this ruling to safeguard their rights and challenge arbitrary actions by tax authorities.

Save this case for future reference as it might come in handy when dealing with GST litigation involving dropped proceedings under Section 61 and subsequent actions under Section 74.

27/11/2024

Dear Friends,
Please take a moment to create your personalized support card through this link and share the same:

https://support.abhishekrajaram.com/

नई चीज़ है , एक बार Try तो करो !!

Thank you for your valuable support!

Thanks & Warm Regards,
CA Raja Abhishek

BALLOT NO. 25
Candidate for NIRC Elections of ICAI

M: 9810638155

30/10/2024

# # # 📢 **"The Vague Show Cause Notice: Why Clarity in GST Notices Matters"**

*By Abhishek Raja Ram* 9810638155

In the realm of Indian GST, a well-structured Show Cause Notice (SCN) serves as a fundamental right for taxpayers to understand, respond to, and contest alleged violations. However, what happens when a show cause notice lacks the necessary clarity? A "vague" SCN can leave taxpayers in the dark, unable to grasp the exact charges or grounds of the allegation, ultimately undermining their right to a fair response.

Let's delve into some notable cases where courts have taken a stand on the importance of precision in SCNs, reinforcing that vagueness has no place in legal proceedings.

---

# # # 🏛️ **Key Judgments Emphasizing the Importance of Clear SCNs**

1. **Lack of Specific Provision Cited**
*Kanyaka Parameswari Oils Pvt. Ltd. - Andhra Pradesh High Court*
The show cause notice failed to specify the exact provision allegedly violated. Courts deemed such a vague notice inadequate for forming a legal demand.

2. **Absence of Taxable Category**
*Nirmal Engineers and Contractors - CESTAT Delhi*
A demand based on a SCN that did not clearly identify the taxable category was declared unsustainable by the court.

3. **Vagueness in Registration Cancellation**
*Bhupendra Singh - Uttarakhand High Court*
The SCN issued for GST registration cancellation was vague, failing to specify whom the assessee should contact or respond to, denying the taxpayer a fair chance to reply.

4. **Retroactive Cancellation with Unclear Allegations**
*S.M. Trading Co. - Delhi High Court*
GST registration was retrospectively canceled citing fraud or suppression of facts without concrete details. The court found the vagueness unacceptable.

5. **Lack of Grounds for Cancellation**
*Sai Aluminium Exim - Delhi High Court*
The SCN proposing GST registration cancellation contained no clear reasons, rendering both the notice and the subsequent cancellation order void.

6. **Non-Specific and Non-Speaking Orders**
*Sing Traders - Gujarat High Court*
Here, the SCN was entirely vague, devoid of material details, and led to an order without justifiable explanations—both deemed legally unsound.

7. **Insufficient Information for Effective Response**
*Shah Industries - Gujarat High Court*
Without adequate specifics in the SCN, the taxpayer could not present a meaningful defense, a point upheld by the court.

8. **Repetitive Allegations Lacking Justification**
*Vijay Mining & Infra Corp. Pvt. Ltd. - CESTAT Hyderabad*
The second SCN repeated facts known to authorities previously, invalidating claims of suppression by the taxpayer.

9. **Failure to Allege Specific Violations**
*M.B. Trading - Tripura High Court*
The SCN issued to cancel GST registration failed to specify any contraventions under the GST Act or Rules, leading the court to call for a fresh, clear SCN.

10. **Demand Exceeding SCN Scope**
*R. Ramadas - Madras High Court*
When the demand in the order exceeded the vague SCN's scope, the court ruled the adjudication order unsustainable due to lack of specific proposals.

---

# # # 🔍 **Why a Clear Show Cause Notice is Crucial in GST Law**

The Indian legal framework under GST requires that SCNs be unambiguous and informative. Taxpayers should clearly know the alleged violations, the specific legal provisions breached, and the detailed grounds for any demand. As observed in the judgments above, an SCN that fails to meet these standards can lead to the cancellation of both the notice and the resultant demand or order. Courts across India consistently emphasize this requirement, setting a strong precedent for upholding taxpayer rights against vague allegations.

# # # 📌 **Conclusion: Taxpayer Rights in Focus**

In conclusion, the issuance of a vague SCN not only compromises the taxpayer's right to defend but also undermines the principles of transparency and fairness in tax administration. The various High Court rulings discussed highlight that without clear and specific allegations, SCNs lack validity, ultimately favoring the taxpayer's stance.

For taxpayers, understanding this principle can empower them to challenge any SCN that lacks clarity, ensuring their rights are protected in the complex world of GST.

---

🔍 **Hope this clarifies the importance of clarity in show cause notices!** 📩

**Abhishek Raja Ram**
📞 9810638155

29/10/2024

🚀 Decoding Inverted Duty Structure Refund Issues – 10 Key Takeaways! 💼📊
Research by Abhishek Raja Ram; 9810638155

💡 Ever found yourself wondering why GST refunds get so tangled up in the "Inverted Duty Structure" mystery? Here’s a detailed breakdown with landmark cases that could save you from refund rejections and delays!

🌐 What is the Inverted Duty Structure?
The Inverted Duty Structure (IDS) occurs when the GST rate on inputs (raw materials) is higher than the rate on output supplies (finished products). Essentially, it creates a situation where taxpayers accumulate a surplus Input Tax Credit (ITC), as the tax paid on purchases exceeds the tax charged on sales. Here’s how it impacts businesses:

Accumulated Credit: With a higher input rate than output rate, excess credit builds up.
Refund Complexity: The law allows refunds on the accumulated ITC, but the process is riddled with technicalities, timelines, and documentation requirements.
Eligibility Confusion: Many taxpayers face hurdles, like being denied refunds on grounds of misfiled forms, wrong authorities, or incomplete documents.
IDS aims to provide relief to businesses affected by GST rate imbalances. However, as you’ll see, the journey to secure refunds under IDS is challenging and requires detailed navigation through GST provisions and judicial support.

🧾 Key Refund Issues under Inverted Duty Structure – Top High Court Rulings 📜⚖️
1️⃣ 🧱 ITC Restrictions on Capital Goods Not Valid for Refund Limitation
P*e Gee Fabrics Pvt. Ltd. (Gujarat High Court)
Even if the GST portal restricts refunds due to wrongly availed ITC on capital goods, taxpayers shouldn’t be denied the refund of accumulated ITC solely based on this.

2️⃣ ⏳ Original Application Date Matters for Limitation
Darshan Processors (Gujarat High Court)
If a refund was initially filed with the wrong authority, the date of this first application must count for the limitation period. Courts favor the earliest filing date to prevent unfair rejections.

3️⃣ 🔄 Fresh Application Post-Retrospective Amendments
Sunil Finishing Works (Rajasthan High Court)
After retrospective amendments in GST rules including services in the IDS refund formula, the court allowed a fresh refund application. The revised law should apply for calculating IDS refunds.

4️⃣ 🛠️ Multiple Inputs Usage Doesn't Bar Refunds
Nahar Industrial Enterprises Ltd. (Rajasthan High Court)
Having multiple inputs for production does not disqualify the taxpayer from receiving IDS refunds.

5️⃣ 🚫 Rejection Due to Ultra Vires Circular Set Aside
Eveready Spinning Mills Pvt. Ltd. (Madras High Court)
If the refund rejection was based on a circular later deemed ultra vires (beyond legal authority), it’s invalid. The case is remanded for fresh consideration.

6️⃣ 📄 Missing Documents – A Second Chance for Submission
Saurabh Aggarwal (Delhi High Court)
If documents (like GSTR-1, GSTR-3B, and GSTR-2A) weren’t asked for before rejection, the taxpayer gets another opportunity to submit them for fair evaluation.

7️⃣ 🧾 Same Input & Output Goods Qualify for IDS Refunds
Micro Systems & Services (Telangana High Court)
When input goods are the same as output goods and fall under concessional GST rates, taxpayers are eligible for refunds on accumulated ITC.

8️⃣ 🧮 Refund Entitlement Clear Despite Tax Rate Differences
Baker Hughes Asia Pacific Ltd. (Rajasthan High Court)
When input tax rates exceed output rates, the GST refund provisions are unambiguous in allowing refunds without exception.

9️⃣ 💰 Restored Amount Not Considered IDS Refund
Induvarna LPG Bottling Pvt. Ltd. (Patna High Court)
If an IDS refund is initially set off against a demand and later restored, the restored amount loses its “IDS refund” character.

🔟 📈 Rate Mismatch Clarified – Refund Justified Despite Supplier’s Error
Commercial Tax Officer vs. Suzlon Energy Ltd. (Madras High Court)
A supplier’s error in overcharging GST on inputs doesn’t mandate an increased tax rate on outputs. The court mandated a refund with interest, reinforcing the taxpayer’s right to a correct rate application.

🏁 Conclusion – Navigating the IDS Refund Maze 🧭✨
Inverted Duty Structure refunds under GST aim to correct the imbalance when input tax rates exceed output tax rates. However, the judicial landscape shows how tricky the path to refunds can be. Taxpayers often face issues due to:

➡️Misfiled forms or authorities
➡️Restrictive or unclear circulars
➡️Insufficient document submissions

These cases illustrate the proactive stance courts take in safeguarding taxpayer rights amidst procedural hurdles. For those facing IDS refund issues, understanding these cases can be a game-changer in claiming rightful refunds. Bookmark these precedents and stay informed to better navigate the GST maze!

Thanks for Reading!
- Abhishek Raja Ram

Top Five FAQs on Search and Seizure in GSTResearch by: Abhishek Raja RamContact: 9810638155Understanding the nuances of ...
24/10/2024

Top Five FAQs on Search and Seizure in GST
Research by: Abhishek Raja Ram
Contact: 9810638155

Understanding the nuances of Search and Seizure under the GST regime is crucial for taxpayers and professionals alike. Here are the top five frequently asked questions (FAQs) on the topic, accompanied by key judicial precedents:

Q1. Can Cash be Seized during Search and Seizure?
A1. No, cash cannot be seized if it does not form part of stock-in-trade. The courts have consistently held that cash, unless it is stock-in-trade, is outside the purview of GST seizure provisions.

Gujarat High Court in Bharatkumar Pravinkumar & Co.
(2023) 79 GSTL 63
The court ruled that cash found during a search, if not part of stock-in-trade, cannot be seized under GST laws.

Kerala High Court in T.H. Fazil
(2023) 78 GSTL 383
The Kerala High Court further emphasized that GST authorities lack the power to seize cash unless it qualifies as stock-in-trade.

Delhi High Court in Jagdish Bansal
(2024) 16 CENTAX 198
Cash is not defined as 'goods' but falls under the definition of 'money' per Section 2(75) of the GST Act. Since seizure under GST is limited to goods, cash cannot be seized under the Act’s provisions.

Q2. Can the Department Initiate Search and Seizure without Providing a Reason to Believe?
A2. No, a search and seizure operation cannot be conducted without a proper reason to believe, which must be documented beforehand.

Allahabad High Court in Gaurav Saurav Traders
(2023) 157 Taxmann.com 432 :: TRT-2024-1232
The court quashed a search and seizure authorization issued by the Joint Commissioner before the reasons for the search had been documented. Proper authorization is essential.
Q3. Is Payment Made during Search Considered Voluntary?
A3. Payments made during search proceedings, especially if no acknowledgement is issued in Form DRC-04, are not considered voluntary.

Delhi High Court in Vallabh Textiles
(2023) 70 GSTL 3
The court held that payments made without an acknowledgement during search are not voluntary. The department was ordered to refund the amount along with interest.

CBIC Instruction No. 01/2022-2023 [GST Investigation] dated 25-May-2022
The instruction emphasizes proper procedural compliance during searches, especially concerning payments.

Q4. Can GST Law Bypass the IPC?
A4. No, GST authorities cannot bypass GST Act provisions by solely invoking IPC for offenses covered under the GST framework.

Madhya Pradesh High Court in Deepak Singhal
(2024) 23 CENTAX 125
The court quashed the FIR and associated proceedings because the GST Act, being a special law, provides a comprehensive framework for GST offenses. The authorities cannot bypass its safeguards by relying solely on the Indian Penal Code (IPC) without following proper GST procedures.
Q5. Is the Power under Section 67 Used to Unearth Evasion or Recover Tax?
A5. The purpose of Section 67 is to unearth tax evasion, not to recover tax directly. Seizures under this section are only valid when connected to the supply of goods or services.

Supreme Court in Deepak Khandelwal
(2024) 21 CENTAX 463
The court ruled that the seizure of cash and silver bars was unsustainable as they were not related to supply or evasion of tax. Section 67 empowers authorities to uncover evasion but does not authorize tax recovery directly through such seizures.
Conclusion
These FAQs provide clarity on critical aspects of Search and Seizure under GST law. Taxpayers must be aware of their rights and the limitations of GST authorities in conducting searches and seizures. Adherence to judicial precedents can safeguard against unwarranted actions during such proceedings.

I hope you find this useful.
Thanks,
Abhishek Raja Ram
9810638155

23/10/2024

🎬 Big Win for Bollywood! 🎉 Producers Guild Secures GST Clarity After 4-Year Battle! 💥

After a long and tireless fight, the Producers Guild of India has finally secured a major victory for the Indian film industry! 💪 The Ministry of Finance has announced a resolution to the ongoing confusion surrounding the Goods and Services Tax (GST) rate on film distribution before October 2021. This is HUGE news for production houses, distributors, and everyone involved in bringing your favorite Bollywood movies to the big screen! 🤩

Why is this such a big deal? 🤔

For the past four years, the industry has been grappling with uncertainty about the correct GST rate. This led to a lot of stress and financial headaches, with many facing show-cause notices. 😓 But thanks to the Producers Guild's dedication and hard work, those days are over! 🥳

This clarity means:

More stability for the industry: Filmmakers can now focus on what they do best - creating amazing movies! 🎬
Reduced financial burden: No more worrying about unexpected GST bills! 💰
A brighter future for Indian cinema: This resolution paves the way for continued growth and success! 🚀

22/10/2024

Mastering the Art of Brevity: The Key to Powerful Legal Drafting 🖋️"

In the Safari Retreat judgment, the Supreme Court reminded us that “Brevity is the hallmark of good advocacy.” The timeless wisdom of “brevity is the soul of wit” holds especially true in legal drafting. A concise, focused response is often your strongest argument when responding to notices or appeals. Why, you ask?

The art of drafting is not about the quantity of words but their quality. The ability to deliver clear, succinct responses is paramount in complex legal and tax matters. Here’s how you can embrace brevity while still making a powerful impact.

✨ Strategies for Achieving Brevity in Legal Drafting:
1. Understand the Core Issues:
Before drafting, take time to analyze the notice or appeal. Identify the main issues and focus on those, rather than getting sidetracked by peripheral matters.

2. Organize Your Thoughts:
Create a structured outline of your arguments. This logical flow helps in presenting your points without unnecessary repetition.

3. Use Clear, Direct Language:
Ditch the legal jargon! Plain language enhances understanding and reduces the chances of misinterpretation.

4. Edit Ruthlessly:
Review your draft with a critical eye. Remove any redundant phrases and unnecessary details. Each word should serve a clear purpose.

5. Provide Relevant Facts and Evidence:
Stick to the key facts and supporting evidence that bolster your argument. Avoid overwhelming the reader with excessive details.

6. Respect the Reader’s Time:
Always consider your reader. A sharp, succinct reply not only shows professionalism but also respects their time.

⚠️ Word of Caution:
While brevity is crucial, don’t sacrifice thoroughness. Your statements should be accurate, well-supported, and strategically crafted. Think of your response as a finely honed blade—sharp and precise, easily cutting through complexity.

🔑 Conclusion:
In the world of legal drafting, less is often more. By embracing brevity, legal and tax experts can craft persuasive replies to notices and appeals with professionalism and clarity. Remember, in legal matters, it’s not about saying more—it’s about saying what matters most, clearly and concisely. 💡

Craft your next reply with brevity and impact!
— Abhishek Raja Ram
📞 9810638155

19/10/2024

Can a Second or Subsequent Notice Be Issued on the Same Grounds?
Research by: Abhishek Raja Ram; 9810638155

When dealing with tax disputes under GST, a key question that often arises is whether the authorities can issue a second or subsequent notice on the same grounds. What’s the legal validity of such notices, especially if a departmental audit has already been completed? Additionally, can a notice under Section 74 be issued after adjudication under Section 73? These are crucial questions for taxpayers facing multiple rounds of scrutiny.

In this post, we’ll explore recent High Court rulings to shed light on these issues.

1. ⚖️🚫 Calcutta HC Pauses SGST Proceedings Pending CGST Adjudication! 🚫⚖️
In a significant ruling, the Calcutta High Court directed the SGST authorities to pause their proceedings related to a discrepancy that was also being adjudicated by the CGST authorities. The court emphasized that parallel proceedings could lead to duplication and unnecessary prejudice against the taxpayer.

Case Reference:
Mr. Mahabir Prasad Kedia vs. The Assistant Commissioner of State Tax (2024) 1 TMI 1098

2. ⚖️🚨 Chhattisgarh HC Upholds Validity of Third Show Cause Notice Under GST! 🚨⚖️
The Chhattisgarh High Court recently ruled in favor of the authorities when a third show cause notice was challenged by the petitioner. In this case, the authorities had previously dropped two notices issued in 2021 and 2022. However, the court upheld the third notice under Section 73 of the GST Act, stating that the department acted within its legal rights.

Case Reference:
South Eastern Coalfields Limited vs. Principal Commissioner, CGST (2023) 11 TMI 399

3. ⚖️📄 Jharkhand HC Upholds Second Show Cause Notice – Petitioner Must Address Discrepancies! 📄⚖️
In another important judgment, the Jharkhand High Court ruled that a second show cause notice issued under Section 61 of the JGST Act, 2017, was valid. The court observed that the second notice was based on new discrepancies, and it did not prejudice the petitioner. This highlights the fact that second notices are permissible, provided they address fresh issues.

Case Reference:
M/S. Jindal Stone Works vs. State of Jharkhand (2024) 10 TMI 880

4. ⚖️📄 Bombay HC Allows Reply to Fresh SCN, Distinguishes from Previous Adjudication! 📄⚖️
The Bombay High Court took a nuanced approach when dealing with a fresh show cause notice related to the 2014-2015 period. Despite an earlier adjudication for the 2012-2014 period, the court ruled that the petitioner must respond to the new notice, as the earlier period’s adjudication did not cover the new discrepancies.

Case Reference:
Deccan Nutraceuticals Pvt. Ltd. vs. Union of India (2022) 5 TMI 570 :: (2022) 64 GSTL 47

Conclusion
The question of whether a second or subsequent notice can be issued on the same grounds is complex, as seen in the above rulings. Courts have generally scrutinized the issuance of multiple notices but upheld their validity under specific circumstances. New discrepancies, different time periods, and distinct statutory provisions often justify the issuance of such notices.

However, when there are pending adjudications by another authority, courts have stressed the importance of avoiding parallel proceedings. For instance, in the Mahabir Prasad Kedia case, the Calcutta High Court halted SGST proceedings while CGST adjudication was still ongoing to prevent duplication and prejudice.

In conclusion, while second or subsequent notices are not outrightly barred, their validity hinges on the specific facts of each case. Taxpayers should carefully review every notice they receive and seek legal counsel to safeguard their rights.

For further guidance or queries, feel free to contact:
Abhishek Raja Ram | 9810638155

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