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2023 (7) TMI 876 - HC - GSTRepetition of proceedings - Attempt to initiate fresh adjudication proceeding in respect of the self- same cause of action which has already attained finality by First Appellate Order - two show cause notices were issued for the same period for the self-same cause of action (except March, 2020) issued by two different authorities - delay in filing returns on which interest is demanded. HELD THAT - Section 107(16) of the JGST Act provides that every 1st appellate order passed thereunder shall be final unless subjected to Revision under Section 108, appeal to Tribunal under Section 113 or appeal to High Court under Section 117 or appeal to Supreme Court under Section 118 of the JGST Act. In the instant case, since the 1st appellate order is not subjected to Section 108, Section 113, Section 117, Section 118; thus, by virtue of sub-Section (16) of Section 107, it has attained finality. The Hon ble Apex Court in the case of CCE Vs Prince Gutkha Ltd. 2015 (7) TMI 964 - SUPREME COURT has held that adjudicating authority dropping earlier demand accepting explanation of Assessee, issuance of second show cause notice on same cause of action, not permissible. In the case of COMMR. OF C. EX., VADODARA VERSUS GUJARAT STATE FERTILIZERS CHEM. LTD. 2008 (7) TMI 61 - SUPREME COURT it is held by the Hon ble Apex Court that order of the Tribunal has attained finality due to non-filing of appeal by the department. Hence, appeal on the same issue is not maintainable which has already attained finality. The Respondents in the instant case being not aggrieved by the First Appellate Order dated 16-01-2021, did not challenge the same or availed remedies available under the law but accepted the same and allowed the same to attain finality; thus now they cannot be allowed to turn around and re-agitate a matter afresh which has already come to an end by due process of law. Having regard to the discussions made, the Revenue cannot re-agitate and issue fresh show cause notices again for the same cause of action covering same period against which the Order passed by the first Appellate Authority has been accepted by the Respondents and same has attained finality. The actions of the Respondent No.2 and the Respondent No.3 is therefore bad in law and is without jurisdiction and is further hit by the principles of res judicata and is clearly not permissible under the law. As stated herein above, after passing of the 1st appellate order, only course available with the Respondents were to challenge the first Appellate Order dated 16-01-2021 before the Appellate Tribunal under Section 112 of the JGST Act, if at all aggrieved, and therefore, the impugned Show Cause Notices are wholly without jurisdiction, without authority of law and also barred by principles of res-judicata. Demand of interest with respect of March, 2020 - HELD THAT - The demand of interest of Rs.6,63,025/- in the impugned first Show Cause Notice dated 16-09-2022 (Annexure-1) is also erroneous and is contrary to State GST Notification No.451 dated 29-07-2017 as amended by Notification No.31/2020-State Tax dated 25-06-2020 and corresponding Central GST Notification No.13/2017-Central Tax dated 28-06-2017 as amended by Notification No.31/2020-CT dated 03-04-2020. As per Notification No.31/2020-State Tax dated 25-06-2020 and Notification No.31/2020-CT dated 03-04-2020 as a COVID-19 relaxation Measures, the rate of interest for the month of February, 2020 to April, 2020 was reduced to Nil for first 15 days of delay and 9% thereafter in place of 18%, for registered persons having annual turnover above Rs.5.00 Cr. Since the annual turnover of the Petitioner is above Rs.5.00 Cr.; hence, they are entitled to the benefit of said notification. Considering the extension of limitation for filing of GSTR-3B returns and reduction in the rate of interest, amount of Interest demand should have been Rs.12,791.44/- only for the month of March, 2020 as against demand of interest of Rs.6,63,026/- in the impugned Show Cause Notice dated 16-09-2022 for the month of March,2020. Thus; the petitioner is liable to pay interest of Rs.12,791.44/- only for the month of March, 2020 as against demand of interest of Rs.6,63,026/-.Thus, the petitioner is directed to pay the same amount within a period of two weeks, if not paid, from the date of receipt/production of copy of this Order. Both the impugned show-cause notices, are hereby, quashed and set-aside - Application allowed.
Issues Involved:
1. Quashing and setting aside the impugned Show Cause Notices. 2. Demand of interest for delayed filing of GSTR-3B returns. 3. Jurisdictional legality and authority of issuing fresh show cause notices. 4. Demand of interest for March 2020. Summary of Judgment: Issue 1: Quashing and Setting Aside the Impugned Show Cause Notices The petitioner sought relief for quashing the Show Cause Notices dated 16.09.2022 and 20.10.2022 issued by different authorities for the same period, which had already attained finality by the First Appellate Order dated 16-01-2021. The court found that the first Appellate Order was accepted by the department and no further appeal was filed, thus attaining finality. The court held that the same issue or cause of action cannot be re-agitated in a fresh proceeding as it is contrary to settled law and principles of res judicata. Issue 2: Demand of Interest for Delayed Filing of GSTR-3B Returns The court noted that the interest demand in the Show Cause Notices was for delayed filing of GSTR-3B returns, not for delayed payment of tax. The petitioner had already discharged interest for delayed payment of tax, which was not in dispute. The court reiterated that the Respondent No.2 should have started proceedings in accordance with Section 73 of the JGST Act before creating the interest demand, as held in previous judgments. Issue 3: Jurisdictional Legality and Authority of Issuing Fresh Show Cause Notices The court observed that the Respondents did not challenge the First Appellate Order and allowed it to attain finality. Therefore, they cannot re-agitate the matter afresh. The court emphasized that restarting fresh proceedings by lower authorities amounts to doing something indirectly which cannot be done directly. The court held that the actions of the Respondent No.2 and Respondent No.3 were bad in law, without jurisdiction, and hit by the principles of res judicata. Issue 4: Demand of Interest for March 2020 The court found that the demand of interest for March 2020 in the impugned Show Cause Notice was erroneous and contrary to the State GST Notification No.451 and corresponding Central GST Notification No.13/2017. The court noted that the rate of interest was reduced as a COVID-19 relaxation measure, and the petitioner was entitled to this benefit. The court directed the petitioner to pay the corrected interest amount of Rs.12,791.44 for March 2020 within two weeks. Conclusion: The court quashed and set aside both the impugned Show Cause Notices and allowed the writ application. The petitioner was directed to pay the corrected interest amount for March 2020.
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