Multiple GST show-cause notices for AY 2021-22 on different issues upheld; pre-SCN DRC-01A doesn't bar fresh SCN

A taxable person challenged a GST SCN for AY 2021-22 as barred because an earlier intimation in Form GST DRC-01A had been issued for the same period, invoking lack of jurisdiction and res judicata. The HC held that issuance of more than one SCN for the same tax period is not prohibited where the notices concern different subject matters, and res judicata (including constructive res judicata) arises only where an issue has been necessarily decided in prior adjudication, not from a pre-SCN intimation. The only recognized bar is reopening/revision of an assessment order by a successor without statutory basis. The writ was dismissed, with liberty to submit a reply to the impugned SCN within 30 days.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the impugned show cause notice issued under Section 73 for the same tax period was without jurisdiction on the ground that an earlier intimation/show cause notice sequence existed for that tax period and a prior court order had set aside an earlier summary show cause notice.

(ii) Whether, under the scheme of the GST enactments, issuance of multiple show cause notices for the same tax period is impermissible, and if permissible, whether overlap/duplication requires quashing of the later notice at the threshold.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Jurisdictional validity of the impugned Section 73 show cause notice in light of earlier proceedings and the prior order

Legal framework (as discussed by the Court): The Court treated determination of tax liability as arising under Section 73 (and not under the scrutiny mechanism), and considered the relationship between scrutiny/intimation and subsequent adjudicatory proceedings.

Interpretation and reasoning: The Court compared the subject-matter of the earlier show cause notice (which had been set aside in its summary form) and the impugned show cause notice. It found that, barring one common element relating to exempt supplies/value of outward supplies (Rs. 19,001), the impugned notice raised different discrepancies (including unreconciled turnover and credit notes). The Court held that the mere fact that an explanation was furnished to an intimation does not, by itself, bar issuance of a show cause notice under Section 73; the proper course is adjudication on merits. The prior order setting aside the earlier summary show cause notice did not operate as a prohibition against initiating a distinct Section 73 proceeding on different issues for the same tax period.

Conclusions: The impugned show cause notice was not shown to be without jurisdiction merely because earlier proceedings existed for the same tax period and a prior order had intervened. The challenge on this ground was rejected.

Issue (ii): Permissibility of multiple show cause notices for the same tax period and treatment of overlap

Legal framework (as discussed by the Court): The Court examined the GST scheme and observed that principles akin to res judicata/constructive res judicata and related procedural bars under the Code of Civil Procedure are not incorporated in the GST enactments. It accepted the view that multiple show cause notices are not barred where they concern different subject-matters.

Interpretation and reasoning: The Court held that there is no bar to issuance of multiple show cause notices for the same tax period if they relate to different and separate issues. It distinguished the situation where multiple notices involve overlapping proposals on the same subject, observing that if overlap exists between two pending proceedings, the demand must be dropped in one of them upon adjudication, rather than quashing the later notice at the threshold. The Court expressly accepted the view that multiple notices are permissible when addressing different subject matters and found the cited interim stay order relied upon by the petitioner to have no precedential ratio applicable to decide otherwise. It further held that general civil procedure doctrines (including estoppel/res judicata-type constraints) do not strictly apply in the tax law context under the GST scheme as considered in the judgment.

Conclusions: Multiple show cause notices for the same tax period are permissible under the GST scheme when they address different issues. Any duplication/overlap is to be dealt with in adjudication by dropping the duplicated demand in one proceeding, not by treating the later notice as jurisdictionally invalid. On the facts, since the impugned notice was substantially different, it was sustained.

Final disposition and operative direction (material to decision): The writ petition challenging the impugned show cause notice was dismissed. Liberty was granted to submit a reply to the impugned notice within 30 days from receipt of the order, with the authority directed to proceed to a final order on merits thereafter; failing compliance, the authority was left at liberty to proceed in accordance with law.

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