GST audit overlap limits demand notices, while partial overlap may still permit adjudication after reply and hearing.

A GST show-cause-cum-demand notice should ordinarily not be initiated for a period already covered by a completed statutory audit, especially where audit observations have been issued and payment has been made through Form GST DRC-03. Where the notice period only partly overlaps with the audited period, however, the proper officer may still proceed with adjudication on the remaining portion after considering the reply and granting a hearing. The adjudication order was restrained from being communicated or uploaded without further leave, and interim protection was recognised only to the extent of the audit-covered period.

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Issues: Whether a show-cause-cum-demand notice under the GST law could be sustained for a period already covered by a completed audit, and whether interim restraint was warranted in respect of the overlapping portion.

Analysis: The audit proceedings had covered July 2017 to March 2022, audit observations had been issued, and the petitioner had made payment through Form GST DRC-03. On that basis, the order records that ordinarily no proceeding should be initiated for a period already audited and concluded under the statutory audit mechanism. At the same time, the notice period only partly overlapped with the audit period, and the proper officer was permitted to proceed with adjudication after considering the petitioner's reply and granting hearing. The adjudication order was directed not to be communicated or uploaded without further leave of the Court.

Outcome: The Court found a prima facie case in favour of the petitioner only to the extent of the audit-covered period, but declined full interference at the interim stage and directed filing of a reply and further adjudication.

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