Jayanthi Plastics (Defunct)
VERSUS
The Deputy State Tax Officer-2
Citation: 2024 taxo.online 802
In the case of M/s Jayanthi Plastics (Defunct) v. The Deputy State Tax Officer-2, the Madras High Court ruled in favor of the assessee, highlighting procedural irregularities in the issuance of show cause notices (SCNs) by the department. The petitioner, M/s Jayanthi Plastics, had been issued a show cause notice to explain discrepancies in output tax liability between GSTR-1 and GSTR-3B returns. However, during the pendency of the order, another show cause notice was issued, including the reconciliation of GSTR-1 and GSTR-3B, which had already been addressed in the earlier adjudication order.
The petitioner challenged the subsequent show cause notice on the grounds that one of the issues it raised had already been settled in the earlier order. The court examined both the adjudication order and the impugned show cause notice and found that the issue raised in the latter was identical to the one determined in the former. It held that the department was not permitted to reopen the same issue after issuing the earlier order.
Consequently, the court directed the petitioner to respond to the show cause notice only concerning the issues of under-declaration of ineligible Input Tax Credit (ITC) and invalid ITC under Section 16(4) of the CGST Act. As for the issue related to the reconciliation of GSTR-1 and GSTR-3B, the impugned show cause notice was set aside. The court emphasized that all contentions were left open to the petitioner while responding to the show cause notice.
This ruling underscores the importance of procedural fairness and adherence to legal principles in departmental proceedings. It reaffirms the principle that once an issue is decided in an assessment order, the same issue cannot be reopened in subsequent notices, thereby ensuring certainty and consistency in tax administration.
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