Parallel proceedings cannot be conducted by the 3 wings of same department for the same tax period

[CA Bimal Jain]

The Hon’ble Calcutta High Court in M/S. R.P. BUILDCON PRIVATE LIMITED & ANR. VERSUS THE SUPERINTENDENT, CGST & CX, CIRCLE – II, GROUP-10, AUDIT-I COMMISSIONERATE & ORS. - 2022 (10) TMI 507 - CALCUTTA HIGH COURT held that that the audit proceedings under Section 65 of the Central Goods and Services Act, 2017 (“the CGST Act”) has already commenced by Audit Commissionerate thus, it is appropriate that the proceedings should be taken to the logical end by Audit Commissionerate itself. It was further concluded that, the proceedings initiated by the Anti Evasion and Range Office for the very same period shall not be proceeded with any further.

Facts:

The Superintendent, CGST & CX (“the Respondent) issued notices relating to financial year 2017-2018 to 2019 – 2020 for which an audit under Section 65 of the CGST Act. In the meantime scrutiny of returns under Section 61 of the CGST Act, 2017 was conducted for the same tax period by the Anti Evasion wing as well as the Range Office.

M/s. R.P. Buildcon Private Limited & Anr (“the Appellant”) filed a writ petition to quash the show cause notice (“SCN”) issued by the Respondent contending that once an audit under Section 65 of the CGST Act, has been conducted, the scrutiny of returns under Section 61 of the CGST Act, 2017 cannot be done for the same tax period.

Further, the writ petition was dismissed by this Hon’ble Court in an order dated September 19, 2022 (“the Impugned order”) on the ground that the notice issued by the Respondent was in the form of SCN and cannot be quashed.

Therefore, being aggrieved by the Impugned order, the Appellant filed this appeal.

Issue:

Whether or not parallel proceeding for the same tax period by the same department can be conducted?

Held:

The Hon’ble Calcutta High Court in M/S. R.P. BUILDCON PRIVATE LIMITED & ANR. VERSUS THE SUPERINTENDENT, CGST & CX, CIRCLE – II, GROUP-10, AUDIT-I COMMISSIONERATE & ORS. - 2022 (10) TMI 507 - CALCUTTA HIGH COURT held as under:

• Held that since the audit proceedings under Section 65 of the CGST Act was already commenced by the …., it is but appropriate that the proceedings should be taken to the logical end by the …., and the proceedings initiated by the Anti Evasion and Range Office for the very same period cannot be proceeded with any further.
• Directed the Respondents to issue SCN to the Appellants within a period of six weeks from the date of receipt of the server copy of this judgment and order and afford a reasonable opportunity to the Appellants to submit their reply along with documents.
• Allowed the appeal filed by the Appellant and set aside the Impugned order directing that an opportunity of personal hearing must be granted to the authorized representative of the Appellants either in physical or in virtual mode, and a speaking order be must passed on merits and in accordance with law within a period of three weeks from the date on which the personal hearing is concluded.

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