Show cause notice for improper ITC availment and product mis-classification upheld, multiple notices for same period allowed

The Allahabad HC dismissed a petition challenging a show cause notice dated 4.8.2024 regarding improper ITC availment for taxable and exempted supplies without maintaining separate records, and mis-classification of products as exempted goods. The court held that two show cause notices for the same period with different subject matters are legally permissible, finding no grounds for interference. Regarding the petitioner's concern about two different authorities adjudicating the notices, the court directed that the petitioner could approach the respective authorities, who would examine the viability of consolidating adjudication under a single authority. The petition was disposed of without relief to the petitioner.

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In the case before the Allahabad High Court, the petitioner challenged the issuance of two separate show cause notices by the respondents for the same period. The first notice, dated 30.07.2024, was issued by the Assistant Commissioner (AE), CGST, Meerut, concerning the petitioner's failure to maintain separate records for the availment of ITC related to taxable and exempted supplies. The second notice, dated 04.08.2024, pertained to the alleged misclassification of a product as exempted goods instead of taxable at a 5% rate.

The petitioner argued that issuing two notices for the same period was unjustified and warranted setting aside the second notice. However, the respondents contended that the notices addressed distinct and independent subject matters, and there is no legal prohibition against issuing multiple notices for different issues within the same period. The court agreed with the respondents, noting that the subject matters of the notices were "totally different" and thus permissible under the law.

Regarding the petitioner's concern about appearing before different authorities, the court stated that the petitioner could approach the authorities to request that both notices be adjudicated by the same authority. The petition was disposed of with these observations, allowing the petitioner to seek consolidation of the proceedings if deemed necessary by the authorities.

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