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of <h1>Proceedings under Section 73 barred after dropping Section 61(3), but Section 74 fraud cases remain valid</h1> <h3>Amit Agarwal Versus Assistant Commissioner, CGST & CX & Anr.</h3> Amit Agarwal Versus Assistant Commissioner, CGST & CX & Anr. - TMI ISSUES: Whether initiation of proceedings under Section 74 of the WBGST/CGST Act, 2017 is permissible after proceedings under Section 61 have been dropped for the same tax period.Whether issuance of repeated or multiple show cause notices for the same cause and period is legally valid under the said Act.Whether the proper officer's decision to drop proceedings under Section 61(3) precludes initiation of proceedings under Section 73 or Section 74 for the same period.The scope and applicability of Sections 61 and 74 of the WBGST/CGST Act, 2017 in cases involving allegations of fraud, willful misstatement, or suppression of facts. RULINGS / HOLDINGS: Proceedings under Section 74 of the said Act can be initiated even after proceedings under Section 61 have been dropped, as Section 74 'stands on entirely different footing' dealing specifically with cases of fraud, willful misstatement, or suppression of facts.The dropping of proceedings under Section 61(3) is not an impediment for initiating proceedings under Section 74, although it may bar proceedings under Section 73 for the same period.The issuance of a show cause notice under Section 74 in respect of the same period is valid where 'a specific case of fraud has been made out' and the proper officer has relied on additional investigative material such as an 'Alert Circular.'Repeated show cause notices for the same cause and period are generally impermissible; however, this case does not involve multiple show cause notices but distinct proceedings under different sections based on different grounds.The judgments relied upon by the petitioner concerning prohibition of repeated proceedings and show cause notices do not apply to the facts of this case, as those cases involved different factual and legal circumstances. RATIONALE: The Court applied the statutory framework of the WBGST/CGST Act, 2017, particularly Sections 61 and 74, interpreting Section 61 as a provision for scrutiny of returns and initial verification, while Section 74 is designed to address cases involving fraud or willful misstatement.Section 61(3) empowers the proper officer to initiate further action if explanations are unsatisfactory, but if proceedings are dropped under this section, it does not bar the initiation of proceedings under Section 74 if fraud or suppression is later detected.The Court emphasized the legislative intent that 'fraud vitiates all conducts,' justifying separate proceedings under Section 74 notwithstanding prior dropping of Section 61 proceedings.The Court distinguished the present case from precedents cited by the petitioner, noting that those cases involved either final adjudications or multiple notices on the same grounds, which are absent here.No dissent or doctrinal shift was indicated; the judgment reaffirmed established principles regarding the distinct nature and purpose of Sections 61 and 74 within the GST framework.
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