issue settled in GST audit u/s. 65 and after dropping ASMT-12, can the department issue SCN , and pass order under section 73

[HimangshuKumar Ray]

RTP is traders. for FY 2017-18, once GST department issued audit notice and settled the matter in audit report u/s. 65(6) of the GST Act on various issues, RTP paid for those issues and common credit was not raised in audit by Audit Team headed by Assistant Commissioner, CGST. Thereafter, Superintendent, CGST issued ASMT-10 on common credit issue, reply submitted in ASMT 11 and dropped the case on common credit issue. Thereafter officer changed and another Superintendent, CGST, directly issued SCN in DRC-01, RTP submitted reply and stated all the previous facts, officer passed order passed and demand raised on common credit issue. My Question is that the order and demand without jurisdiction?

[Sadanand Bulbule]

Dear querist

Once the querries raised under Section 65 are satisfactorily complied, there is no need for initiating any adjudication proceedings by way of issue of SCN in DRC-01. Compliance acts as "China wall" per se. As such multiple proceedings on the same settled issue by the some other authority is not valid  ground to re-open such matters. It's clear case of abuse of power and this is not permitted under the existing scheme of the Act.

Please ask that officer the source of authority for doing what he is not supposed to do. These days unless genuine person shouts, nothing is available what is legally due to him. When justice is not rendered, it needs to be acquired.

[KASTURI SETHI]

Sh.Ray Ji,

Here are case laws  on the issue raised by you. Study all carefully.  These can be very useful to you though the same pertain to pre-GST era.  We cannot forget that the principles of natural justice/fair justice remain the same whether it is pre-GST era or post GST regime.

(i) Demand - No two assessment permissible for same period. [para 23]--Supreme Court in the case of Duncans Industries Ltd. 2006 (8) TMI 185 - SUPREME COURT

(ii) Demand - Second show cause notice - Cause of action, same - Adjudicating authority dropping earlier demand on clandestine removal, accepting explanation of assessee on recovered documents - Issuance of second show cause notice on same cause of action, not permissible - No error in Tribunal’s findings of setting aside of demand under second show cause notice - Section 11A of Central Excise Act, 1944. [para 3]---Supreme Court in the case of CCE, Merrut-II Vs. Prince Guta Ltd. 2015 (7) TMI 964 - SUPREME COURT.

(iii)  Also see judgement of High Court of Jharkhand at Ranchi in the case of Ambey Mining Pvt. Ltd. - 2023 (7) TMI 876 - JHARKHAND HIGH COURT based on Supreme Court judgement.

(iv)  UOI Vs. Vicco Laboratories - 2007 (11) TMI 21 - SUPREME COURT.

[KALLESHAMURTHY MURTHY K.N.]

Dear Sir,

Section 6 of the CGST Act is to safeguard a taxpayer from being subjected to multiple authorities for the same subject. 

 Also, Sec. 75(13) emancipate that where any penalty is imposed u/s 73 or 74, no penalty for the same act or omission shall be imposed on the same person under any other provision of the Act.  

In this query, no penalty was levied previously, however, any officer cannot take a second opinion on the same issue once raised and settled. 

With regards.

[Amit Agrawal]

Dear Shri HimangshuKumar Ray Ji,

You have said in your query is that Dept. dropped the case on common credit issue and subject-line of your query talks about Form ASMT-12. 

Thus, it is understood by me that 'against your submission in Form ASMT-11, Dept. officer had indeed issued Form ASMT-12 (i.e. Order of acceptance of reply against the notice issued under section 61). 

And if so, no SCN could have been issued on very same issue in view of Section 61(2). 

If Dept. feels that subject Form ASMT-12 was wrongly issued, only option left for Revenue is convince 'the Revisional Authority' to use Section 108 by explaining him how conditions u/s108 are satisfied to be used in the given case. 

New Superintendent, on his own authority, cannot override order of previous Superintendent by issuing SCN. 

These are ex facie views of mine and the same should not be construed as professional advice / suggestion or recommendation.

[KASTURI SETHI]

If the issue is same, the  period is same and the assessee is same, the SCN cannot be re-issued. 

[HimangshuKumar Ray]

Thank you all sir, for quick reply and valuable opinion, discussion.

[Shilpi Jain]

Look at challenging this order in a Writ to the High Court and get it quashed on the basis of the various inputs given by the experts.

AI Summary

Protection against double assessment: prior audit compliance bars fresh SCN on the same issue and period.
Settled audit conclusions and an accepted reply under the assessment notice form preclude a subsequent show cause notice and adjudication on the same issue, period and taxpayer; revenue must use the designated revisional power rather than freshly reopen the matter, reflecting the finality of audit proceedings and protection against double assessment.