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

[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?

Posts / Replies

[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. reported as 2006 (201) E.L.T. 517 (S.C.)

(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 (322) E.L.T. 165 (S.C.).

(iii)  Also see  judgement of  High  Court of Jharkhand at Ranchi in the case of Ambey Mining Pvt. Ltd. reported as 2023 (76) G.S.T.L. 191 (Jhar.) based on Supreme Court judgement.

(iv)  2007 (218) E.L.T. 647 (S.C.) UOI Vs. Vicco Laboratories 

    

[KALLESHAMURTHY MURTHY]

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.