TaxTMI 
TaxTMI 
2026 (5) TMI 700
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....r the Respondent(s) : A.S.G.I., Krishna Agarawal, Parv Agarwal, Saumitra Singh ORDER 1. Heard Mr. Dhruv Agarwal, learned Senior Advocate, assisted by Ms. Upasna Agrawal, Mr. Varun Srivastava, Mr Salil Arora, Mr. Nalin Talwar, Mr. Rajesh Kumar Thakur, Mr. Suyash Agarwal, Mr. Praveen Kumar, Mr. Pranjal Shukla, Mr. Bharat Raichandani (through video conferencing) alongwith Namit Kumar Sharma, Mr. Sudhanshu Yadav and Mr. Rishi Raj Kapoor, learned counsel for the petitioners; Mr. N.C. Gupta, learned Senior Counsel assisted by Mr. Sudarshan Singh, learned counsel for Union of India; Mr. Dhananjay Awasthi, Mr. Gaurav Mahajan, Mr. Krishna Agarwal, Mr. Amit Mahajan and Mr. Parv Agarwal, learned counsel for the revenue, Mr. Nimai Das, learned Additional Chief Standing Counsel, Mr. Arvind Mishra, learned Standing Counsel and Mr. Ankur Agarwal, learned Standing Counsel for the State. 2. The present batch of petitions has been filed to challenge the proceedings initiated under sections 74 and 73 of the Central Goods and Service Tax Act, 2017 and UP Goods and Service Tax Act, 2017, (collectively described as the Acts). Since these petitions raise common issues, they have been heard toget....
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....7500/2025 M/s S.D. Freshners Ltd. Through its Director Shri Mahesh Prasad and another Vs. Union of India and 5 others 30.09.2025 - 74 3. 1000/2025 M/s Mandakini Accommodation Pvt.Ltd. Vs. Union of India and another 27.03.2024 26.11.2024 74 2017-18, 2018-19, 2019-20, 2020-21 & 2021-22 4. 2537/2025 M/s DBL Lucknow Sultanpur Highways Ltd. Vs. Union of India and 3 others - 04.02.2025 & rectification order dated 11.04.2025 74 2017-18 5. 4965/2025 M/s NGT Nirman Pvt. Ltd. Vs. Union of India and 2 others 28.05.2025 - 74 2018-19, 2019-20, 2020-21, 2021-22 & 2022-23 6. 1119/2025 M/s Mandakini Heaven Huts Pvt. Ltd. Vs. Union of India and another 30.08.2024 28.03.2024 74 2017-18, 2018-19, 2019-20, 2020-21 & 2021-22 7. 2246/2025 Raj Trade Link Corporation Vs. Union of India and 2 others - 01.02.2025 74(1) 2024-25 8. 2247/2025 Raj Trade Link Corporation Vs. Union of India and 3 others - 01.02.2025 74(1) 2024-25 9. 2454/2025 Raj Trade Link Corporation Vs. Union of India and 3 others - 23.09.2024 74(1) 2024-25 10. 2456/2025 ....
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....ever, a closure report was issued in that respect, on 17.03.2025. Thereafter, proceedings were initiated and continued calling for statements to be recorded and replies to be furnished. Later, the impugned SCN dated 30.09.2025, was issued to petitioner nos. 1 and 2. 9. In these facts, the petitioner M/S S.A. Aromatics Pvt. Ltd. has approached the Court, with the grievance noted earlier in this order. At the same time, in the two cases involving the petitioners - M/S S.A. Aromatics Pvt. Ltd., M/S S.D. Fresheners Limited, an additional ground has been pressed that the SCN impugned in these writ petitions suffer from jurisdictional error on account of violation of Section 6(2)(b) of the Acts. Details of the same have been given in a tabular form, as below: DATE INVESTIGATING AGENCY COMPANY NAME SECTION SCN DATE ORDER DATE TAX PENALTY INTEREST TOTAL AMOUNT PERIODS DRC 03 FILLED DRC-04 RECD 24.02.2020 DRI & E S.D. FRESHNE RS LIMITED S.A. AROMATI CS PVT LTD 74(5) 74(5) NO NO 24.06.2020 24.06.2020 16610154 2506668 2491524 3760....
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....23- 24, 202425) 24.06.2025 24.06.20 25 21.07.2025 21.07.20 25 DATE INVESTIGATING AGENCY COMPANY NAME SECTION SCN DATE ORDER DATE TAX PENALTY INTER EST TOTAL AMOUNT PERIODS DRC 03 FILLED CLOSURE REPORT 17.04.2023 DGGI, GHAZIABAD S.D. FRESHNE RS LIMITED S.A. AROMATI CS PVT LTD 74(1), 122 74(1), 122 30.09. 2025 30.09. 2025 NA NA NIL NIL NIL NIL NIL NIL NIL NIL AUG 2019 TO SPE 2023 AUG 2019 TO SPE 2023 "Comments:-It has been seen that the search by DRI&E, Kolkata dated 24-02-2020, periods covered was from April'2019 to March'2020 search by SGST dated 11.09.2024, periods covered was from April2021 to Sep'2024 search by SGST dated 13.06.2025 based on comparison of sales of Pan Masala with Tobacco, periods covered was from April'2021 to March'2025 in S.A.Aromatics Pvt Ltd and in S D Freshners Limited periods covered was from April'2024 to March'2025 but it was comperative to Apr'2021 to March'2025 search by DGGI dated 17.04.2023 period ....
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.... Mumbai Vs. Anjum M.H. Ghaswala and others, (2002) 1 SCC 633; Mehsana District Central Cooperative Vs. State of Gujarat and others, (2004) 2 SCC 463. 12. Third, referring to the language of Section 73 and comparing the same with Section 74 of the Acts, specifically referring to the provisions pertaining to Section 73/74 (1), 73/74 (2) and 73/74 (10), it has been stressed - the limitation to finalize any adjudication order is fixed/rigid. It has been prescribed with reference to the last date to furnish annual return for a Financial Year or (in the alternative) with reference to the date of refund. Cases of refund apart, the period of limitation is clearly referable to a Financial Year and/or tax period for which a return is to be filed. 13. That period of limitation being rigid and fixed, the limitation to issue a notice under Section 73/74 (1) ends three months (in cases falling under Section 73) and six months (in the case of Section 74 proceedings), before the end of the limitation to frame the order. To the extent the SCN dated 30.09.2025 has been first received by petitioner no. 2 in Writ Tax No. 7515 of 2025 on 8.10.2025, after expiry of minimum time limitation prescrib....
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....h, objecting to considerations of administrative exigency or convenience, learned Senior Counsel has relied on State of U.P. and others Vs. Jai Prakash Associates Ltd., (2014) 4 SCC 720, to submit that the defence of administrative chaos may not be recognized as a good ground to defend a proceeding that lacks jurisdiction. To the same effect, reliance has been placed on B. Prabhakar Rao & others Vs. State of Andhra Pradeswh & others, 1985 (SUPP) SCC 432. 18. The above submissions are described to have found acceptance of the Karnataka High Court in M/S Pramur Homes and Shelters Vs. Union of India and others, 2025:KHC:52750. That High Court has reasoned - occasioned by the requirement to file monthly, quarterly and annual returns and the time limit prescribed, the requirement to issue individual SCNs for the purposes of adjudication may remain referable to the 'tax period' or a FY. Keeping in mind the principle applicable to assessment and payment of tax linked to the tax period and the timelines arising with reference thereto, it has been further reasoned that the decision of the Delhi High Court in M/s Mathur Polymers Vs. Union of India, 2025:DHC:7435-DB may not be a good law. ....
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....'tax periods' are covered under Section 74(5) of the Acts. To that extent, the impugned show-cause notice would remain barred on the strength of Section 6(2)(b) of the Acts. 22. Last, it has been submitted, the view taken by the Delhi High Court in M/s Mathur Polymers (supra) and Ambika Traders (supra) has not attained finality as may lend strong persuasive value to it. In a later case - M/s Aparna Collection Vs. Union of India & Ors. W.P. (C) No. 890/2025, the writ petition filed directly before the Supreme Court under Article 32 of the Constitution of India was disposed of with the following observation: "The petitioner will be at liberty to bring to the notice of High Court the decisions of the Madras High Court and the Andhra Pradesh High Court and it can be considered and disposed of by the High Court on its own merits." Thus, the issue is again engaging attention of the Delhi High Court. It has issued notice on the petition filed by M/s Aparna Collection (supra). 23. Mr. Suyash Agrawal, learned counsel for some of the petitioners, has first adopted the submissions advanced by Mr. Dhruv Agarwal, learned Senior Advocate. He has pointed out that the adjudicatio....
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....n proceedings are preceded by search, scrutiny or audit. Under Section 61(3) of the Acts, the return may be processed. Only if no satisfactory explanation is furnished 'for the month', appropriate action may be initiated, including adjudication. Further, by virtue of Section 74(10) of the Acts, an adjudication order itself is required to be passed within time prescribed with reference to the date of furnishing return. Since return may be furnished only with respect to a 'tax period', inherently under Section 74 of the Acts, such proceedings must arise and be restricted to one 'tax period', not exceeding a FY, against one SCN. 27. Then, referring to Rule 142 of the Rules framed under the Acts, it has been submitted that DRC-07 itself may not be issued for more than one FY. Hence adjudication proceedings may also be initiated, conducted and included, for one FY at a time, only. 28. With respect to challenge raised in Writ Tax No. 2247 of 2025, an additional ground based on Section 6(2)(b) of the Acts has been pressed. It has been pointed out that a SCN was issued on 18.01.2021 and order passed on 08.12.2021 under Section 122 of the U.P.G.S.T. Act. Later, the impugned Show Cause....
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....CN. 32. Reference has also been made to the amnesty schemes brought under the Acts that were introduced and enforced keeping in mind the principle of one FY being one assessment unit. The concept of multiple 'tax periods' being bunched into a single proceeding under the Acts is alien to the basic scheme of the Acts. Even offences and compounding measures have been provided under the Acts on a Financial Year basis only. 33. Meeting the above submissions, Mr. Dhananjay Awasthi, learned counsel for the revenue has first pointed out that the provisions of Section 74 of the Acts are pari materia to provisions of Section 11A of the Central Excise Act, 1944. Heavily relying on the reasoning offered by the Delhi High Court in Ambika Traders (supra), he would submit, there is no bar in law to issue a single SCN for multiple 'tax periods'. He has placed great reliance on the true import of Section 74 (10) of the Acts, to submit - the same is only a time limitation provision but not a provision to limit the scope of the proceedings initiated under a SCN. The said provision only provides the end date for termination of an adjudication proceeding. For that purpose, the legislature thought....
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....may be settled through proper adjudication proceedings involving similar transactions, by the same assessee or the same set of assessee's. For resolution of such disputes, the adjudication proceedings do not recognize the end boundaries of individual FYs, arising from regular returns filed by the parties to a dispute i.e. assessee's. If a SCN issued involves other disputes for which jurisdictional facts may not be established, that issue may remain open to challenge in proper facts. 38. Last, it has been submitted, no prejudice may be caused to the petitioners by issuance of a common Show Cause Notice. 39. Mr. N.C. Gupta learned Senior Advocate assisted by Mr. Sudarshan Singh learned counsel for Union has also adopted the submissions advanced by Mr. Dhananjay Awasthi. He has also stressed that Section 2(106) is relevant only for the purpose of a 'tax period' for which a return may be filed. Referring to Section 73(3), he would submit that it permits the Proper Officer to demand tax for more than the period for which the initial SCN may have been issued. Also, it has been stressed that Section 73(10) is only a time limitation provision. 40. In rejoinder, Mr. Dhruv Agarwal l....
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.... liquor, for human consumption. 43. Furnishing of details for outward supplies is prescribed under Section 37 of the Acts. Relevant to our discussion, Sections 37(1) of the Acts reads as below: "Section 37. Furnishing details of outward supplies.- (1) Every registered person, other than an Input Service Distributor, a non-resident taxable person and a person paying tax under the provisions of section 10 or section 51 or section 52, shall furnish, electronically [subject to such conditions and restrictions and] in such form and manner as may be prescribed, the details of outward supplies of goods or services or both effected during a tax period on or before the tenth day of the month succeeding the said tax period and such details [shall, subject to such conditions and restrictions, within such time and in such manner as may be prescribed, be communicated to the recipient of the said supplies]:" (emphasis supplied) 44. Then, the provision for furnishing of monthly and other returns is contained in Section 39 of the Acts. Relevant to our discussion, provisions of Section 39(1) and (2) of the Acts read as below: "Section 39. Furnishing of returns.- ....
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.....]" (emphasis supplied) 46. Then, assessments are provided under Chapter XII of the Acts. In that, Sections 59, 60(1) and (3), 61(1), 62(1), 63 and 64(1), to the extent they are relevant to our discussion, read as below: "59-Self-assessment Every registered person shall self-assess the taxes payable under this Act and furnish a return for each tax period as specified under section 39. 60. Provisional assessment.- (1) Subject to the provisions of sub-section (2), where the taxable person is unable to determine the value of goods or services or both or determine the rate of tax applicable thereto, he may request the proper officer in writing giving reasons for payment of tax on provisional basis and the proper officer shall pass an order, within a period not later than ninety days from the date of receipt of such request, allowing payment of tax on provisional basis at such rate or on such value as may be specified by him. ... (3) The proper officer shall, within a period not exceeding six months from the date of the communication of the order issued under sub-section (1), pass the final assessment order after taking into ac....
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....on of Additional Commissioner or Joint Commissioner, proceed to assess the tax liability of such person to protect the interest of revenue and issue an assessment order, if he has sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue: Provided that where the taxable person to whom the liability pertains is not ascertainable and such liability pertains to supply of goods, the person in charge of such goods shall be deemed to be the taxable person liable to be assessed and liable to pay tax and any other amount due under this section." (emphasis supplied) 47. Since audit provisions have also been referred to during submissions advanced, we may take note of provisions of Section 65(1) and 66(1) of the Acts and Rule 101 of the Rules framed thereunder. They read as below: "Section 65. Audit by tax authorities- (1) The Commissioner or any officer authorised by him, by way of a general or a specific order, may undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed. 66. Special audit- (1) If at any stage of scrutiny, inquiry, invest....
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....he period up to Financial Year 2023-24,] not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any willful-misstatement or suppression of facts.- (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. (2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any pe....
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....ngly availed or utilised relates to or within three years from the date of erroneous refund. (11) Notwithstanding anything contained in subsection (6) or sub-section (8), penalty under subsection (9) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax. (12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24. 74. Determination of tax [pertaining to the period up to Financial Year 2023-24,] not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willfulmisstatement or suppression of facts.- (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilfulmisstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has er....
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.... notice shall be deemed to be concluded. (9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (10) The proper officer shall issue the order under sub-section (9) within a period of five years from the due date for furnishing of annual return for the Financial Year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund. (11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded. (12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24. Explanation 1.- For the purposes of section 73 and this section,- (i) the expression "all proceedings in respect ....
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....ction (1) are the same as are mentioned in the earlier notice. (5) The penalty in case where any tax which has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised,-- (i) for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, shall be equivalent to ten per cent. of tax due from such person or ten thousand rupees, whichever is higher; (ii) for the reason of fraud or any wilfulmisstatement or suppression of facts to evade tax shall be equivalent to the tax due from such person. (6) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (7) The proper officer shall issue the order under sub-section (6) within twelve months from the date of issuance of notice specified in sub-section (2): Provided that where the proper officer is not able to issue the order within the specified period, the Commissioner, or an officer authorised by the Commissioner senior in rank to the ....
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.... sixty days of issue of the notice, and on doing so, all proceedings in respect of the said notice shall be deemed to be concluded; (iii) pay the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within sixty days of communication of the order, and on doing so, all proceedings in respect of the said notice shall be deemed to be concluded. (10) Where the proper officer is of the opinion that the amount paid under clause (i) of sub-section (8) or clause (i) of sub-section (9) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (11) Notwithstanding anything contained in clause (i) or clause (ii) of sub-section (8), penalty under clause (i) of sub-section (5) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax. (12) The provisions of this section shall be applicable for determination of tax pertaining to the Financial Year 2024-2....
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....nd, there are decisions of the Karnataka High Court in M/S Pramur Homes and Shelters (supra); Bombay High Court in M/s Milroc Good Earth Developers (supra); Madras High Court in Titan Company Ltd. (supra); and R.A. & Co. (supra) and Kerala High Court in Tharayil Medicals (supra). 51. Though there is no direct decision of the Supreme Court laying down the binding law, at the same time, it is a fact-after Special Leave to Appeal against M/s Mathur Polymers (supra) and Ambika Traders (supra) were dismissed, in M/s Aparna Collection (supra) on a writ petition being filed directly before the Supreme Court under Article 32 of the Constitution of India, the matter has been required to be examined by the Delhi High Court. That proceeding is pending. 52. We are benefited by the views and the counter views that have enriched the legal discourse experienced before different High Courts and their decisions that help us carry that discourse further on the issue - whether a SCN notice may be issued under Section 73/74 of the Acts involving more than one tax period, stretching beyond one FY and/or involving more than one noticee. Primarily, the interpretation made in favour of the revenue h....
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....s defining the term "quarter" [under Section 2(92) of the Acts], as the period of three consecutive calendar months ending on the last days of March, June, September and December, of every calendar year. The word "return" defined under Section 2(97) of the Acts, means a return that may be prescribed under the Rules. Also, the words "Tax Period" mean the period for which a return is required to be furnished. Read together with the substantive provisions, they do create a concept of FY as a unit of assessment. 57. As to furnishing returns, obligations have been created under Section 37 of the Acts, (to be complied with by suppliers); under Section 39, on every registered person, for every calendar month or part thereof and under Section 44, to file annual returns. That obligation may be further extended - to require filing of returns for every "quarter", as well. Therefore, the obligation to file returns for each unit of assessment is clearly linked to a calendar month and FY, as understood in the realm of fiscal regimes. It may also extend to a quarter. To that extent there is no doubt. However, that obligation created by the law appears to be for the purpose of filing returns an....
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....ssessment' or 'provisional assessment' or 'best judgment assessment' either against non-filers of returns or against unregistered persons or in certain circumstances 'summary assessment'. Primarily, in that context FY or its part, is the unit of assessment. Hence, that concept is relevant to and may be applied in those circumstances, without any exception. 63. Thus, in the provisions pertaining to 'assessment' falling under Chapter XII of the Acts, their scheme clearly creates the concept of return-based assessment or assessment for a tax 'period'. That leads to the concept of assessment-unit whether a month or quarter or a FY. To the extent, such assessment may be made on the strength of or based on a pre-existing obligation to file a return of tax, the unit of assessment may remain a FY for which 'annual return' may have been filed or was mandatory to be filed. Therefore, for the purpose of assessment under Chapter XII of the Acts, a FY or its parts, i.e. months, quarter and FY may constitute assessment units to which that procedure to determine the tax liability may be applied. 64. It is equally true that with respect to audit, falling under Section 65 of the Acts read ....
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....t appears" that "any tax has not been..." enable the Proper Officer to identify a dispute of the nature specified in the later part of Sections 73(1) and 74(1) of the Acts. 70. In that context, sub-Section (1) of Sections 73 and 74 provide that the Proper Officer 'shall serve notice' - with respect to specified amount of tax not paid, tax short-paid or tax, wrongly refunded or ITC that may have been erroneously granted or wrongly availed or wrongly utilized. With respect to that dispute, the noticee is required to "show cause" as to why they may not be required to pay the disputed amount of tax, along with interest and penalty. 71. By very nature of that proceeding contemplated by the legislature, the legislature has avoided conditioning it within the limits of a 'period' or 'tax period' or to one FY. Therefore, there is no warrant to restrict the application of Sections 73 and 74 of the Acts to singular 'tax period', emerging from obligation to file return for such tax period. It further appears that the legislature has deliberately avoided the language used under Chapter XII of the Acts pertaining to assessments, whether on the strength of returns or on a best judgment asse....
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....der the classic return-based assessment procedures under the sales tax laws, there existed provisions for reassessment in certain circumstances, involving escapement of turnover, etc. That concept does not find any place under the Acts. To that extent, the adjudication procedure, especially under Section 73 of the Acts, is a clear replacement for reassessment procedure. Thus, the adjudication procedure is traceable to the procedures of Central Excise and Service Tax regimes. The primary difference is - the reassessment procedure recognizes the FY or AY as a distinct unit of assessment, whereas the adjudication procedure breaches the end boundaries thereof and looks at the 'dispute' with respect to payability of specified amounts of tax or penalty or reversal of refund or availment of ITC etc., as the subject matter of the proceedings to be drawn. 76. In support of the above, we find further validation in the statutory provisions in Sections 73(3) and 74(3) of the Acts. The Proper Officer is permitted to issue a statement containing details of tax not paid or short-paid for 'such (other) periods', that may not have been included in or for which notice may not have been issued und....
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....riod' for which an annual or other return may be filed. 80. The legislative wisdom is to be deciphered from the intent of the legislature as expressed by specific words used by it. To the extent, the legislature has clearly provided for the scope of proceedings; the manner of their initiation and conduct, and their time limitations through the various sub-clauses of Sections 73 and 74, we find no conflict between the language used in Sections 73(1), (2), (3) and (4) or 74 (1), (2), (3) and (4) with that used in Section 73(10) or 74(10). While Sections 73(1) and 74(1) are provisions providing for the scope/ subject matter of those proceedings, Sections 73(2) read with 73(10) and 74(2) read with 74(10), ensure that notices are issued and proceedings are concluded within the time limitations prescribed under those provisions. Sections 73(3) read with 73(4) and Section 74(3) and 74(4), are provisions for the issuance of further statements by the Proper Officer that naturally cause increase of the specified tax dispute etc. arising on same facts, that may be adjudicated together. These provisions exist for the benefit of the revenue, not the assessee. They enlarge the pre-specified s....
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....sed above, and without being repetitive, we find that the said decision is wholly distinguishable. Assessments would remain return-based and therefore referable to individual 'tax period' only, even under the Act. However, the opposite is true for adjudications. 84. As to the rule of strict interpretation invoked, we may remain reminded that that rule applies to levy provisions or charging provisions of a taxing statute and not to its machinery provisions. In CIT vs. Mahaliram Ramjidas, AIR (1940) PC 1224, the Privy Council stated: "The Section, although it is part of a taxing Act, imposes no charge on the subject, and deals merely with the machinery of assessment. In interpreting provisions of this kind the rule is that that construction should be preferred which makes the machinery workable utres valeat potius quam pereat" 85. Then, applying that rule, in India United Mills vs. Commissioner of Excess Profits Tax, (1955) SCR 810, the Supreme Court adopted that rule and observed as below: "That section is, it should be emphasised, not a charging section, but a machinery and a machinery section should be so construed as to effectuate the charging sections." ....
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.... Acts, we leave that question of validity of individual notices issued to individual noticees open to be examined in individual adjudication proceedings, subject to appropriate objections being raised. Thus, if any noticee objects that he is not liable for a disputed transaction giving rise to the adjudication proceeding or he has been wrongly included as a noticee, it may give rise to an objection in that case. That objection once raised would have to be dealt with and decided by the Adjudicating Authority on the own strength of the objection. 90. Further, we find no room to apply Dhananjay Reddy (supra) or CIT, Mumbai (supra) or Mehsana District Central Cooperative (supra). To the extent, according to us adjudication proceedings do not arise by way of processing of returns filed for any 'tax period' and to the extent Sections 73 and 74 of the Acts do not use that phrase, there is no prescription in law to link adjudication proceedings to a 'tax period'. Therefore, the principle being invoked is inapplicable. Hypothetically, that principle may be invoked if in the course of an assessment procedure falling under Chapter XXII of the Acts, a Proper Officer seeks to make assessment....
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....ing of section 6(2) (b) of the CGST Act. (vi) The expression "initiation of any proceedings" occurring in section 6(2)(b) refers to the formal commencement of adjudicatory proceedings by way of issuance of a show-cause notice, and does not encompass the issuance of summons, or the conduct of any search, or seizure, etc. (vii) The expression "subject-matter" refers to any tax liability, deficiency, or obligation arising from any particular contravention which the Department seeks to assess or recover. (viii) Where any two proceedings initiated by the Department seek to assess or recover an identical or a partial overlap in the tax liability, deficiency or obligation arising from any particular contravention, the bar of section 6(2)(b) would be immediately attracted. (ix) Where the proceedings concern distinct infractions, the same would not constitute a "same subject-matter" even if the tax liability, deficiency, or obligation is same or similar, and the bar under section 6(2)(b) would not be attracted. (x) The twofold test for determining whether a subject matter is "same" entails, first, determining if an authority has already proceeded....
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....atter being inquired into or investigated by it is already the subject of inquiry or investigation by another authority, both authorities shall decide inter se which of them shall continue with the inquiry or investigation. In such a scenario the other authority shall duly forward all material and information relating to its inquiry or investigation into the matter to the authority designated to carry the inquiry or investigation to its logical conclusion. We say, so because, the taxable person except for being afforded the statutory protection from duplication of proceedings, otherwise has no locus to claim which authority should proceed with the inquiry or investigation in a particular matter. (g) However, where the authorities are unable to reach a decision as to which of them shall continue with the inquiry or investigation, then in such circumstances, the authority that first initiated the inquiry or investigation shall be empowered to carry it to its logical conclusion, and the courts in such a case would be competent to pass an order for transferring the inquiry or investigation to that authority. (h) If it is found that the authorities are not complying wi....
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.... they also provide for limitation to initiate the proceedings. Thus, under Section 73(1) read with Section 73(10) of the Acts, proceeding to adjudicate a dispute pertaining to tax not paid or short paid or erroneously refunded or ITC wrongly availed or utilized may be drawn within a period of three months before the end of limitation to pass the adjudication order. No other period of limitation to initiate the proceedings is permissible. Any relaxation in time to initiate the proceedings would necessarily involve either curtailment of minimal period prescribed by law to allow for compliance of rules of natural justice or extension of period of limitation to conclude the proceedings. Neither is permissible, in the context of the language of the Acts, as discussed above. 97. Considered in that light, the prescription contained in Section 73(2) and 74(2) of three months and six months (before the end of termination of limitation to make the order) to initiate the proceedings, must also be read and understood as a hard/fixed period of limitation. In the context of adjudication proceedings contemplated and in view of the statutory mandate of the law under Sections 75(4) of the Acts, ....
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.... orders, by two different authorities, the same must be accepted as correct, without any reservation. It is in the very nature of things that an adjudication order is the culmination of proceedings initiated by an adjudication notice. In fact, that is generally true of all orders passed by statutory authorities arising from any statutory notice. Once an order is passed, the authority is rendered functus officio except to the extent of rectifications etc., where permitted. Also, unless a proceeding is transferred, in accordance with the governing law, to another authority, the proceedings initiated on the strength of a notice issued by one authority may be conducted and concluded by that authority and not by any other. The Acts do not contemplate an automatic transfer of proceedings. Here no objection has been raised by the revenue to the submissions thus advanced. 100. In view of the above conclusion drawn, the writ petitions must meet mixed results. While issue of composite notice is served under Section 74 of the Acts, both for different tax periods and FYs and also multiple assesses, is decided against the petitioners; the other objection based on Section 6(2)(b) of the Acts;....