03.10.2022: Parallel Proceedings By Different Wings Of The Same Department For The Same Period Not Permissible – Calcutta High Court

The Hon’ble High Court of Calcutta vide its order dated 30.09.2022 in the matter of M/s R.P. Buildcon Private Limited & Anr. Vs. The Superintendent, CGST & CX, Circle-II, Group – 10 & Ors. in M.A.T. No. 1595 of 2022 with I.A. No. CAN 1 of 2022, directed the Anti Evasion and Range Office not to pursue the proceedings initiated against the Assessee pertaining to the period, for which the proceedings have already commenced by the Audit Commissionerate, and the same should be taken to the logical end.

The Appellant filed the appeal before the Hon’ble Division Bench against the order dated 19th September, 2022 in W.P.A. No.20025 of 2022 filed by the Appellants, wherein it was prayed to quash the notices issued by the concerned CGST and CX Headquarters, Anti Evasion, Kolkata, North Commissionerate and the notices issued by CGST & CX, Range – III, Barrackpore Division, Kolkata North Commissionerate as the notices sent relates to the financial year 2017-2018 to 2019 – 2020, for which audit has been conducted under Section 65 by CGST & CX, Circle – II, Kolkata Audit – I Commissionerate.  Further prayer was also made to declare the scrutiny of returns under Section 61 of the CGST Act, 2017 cannot be done once an audit under Section 65 has been conducted by the department for the same period.

The learned Single Bench by the impugned order had dismissed the writ petition on the ground that the proceedings are in the nature of show cause notice. Aggrieved by such order, the appellants have filed the appeal.

Appellant’s Submissions: –

  • It was submitted on the behalf of the Appellants that four issues were pointed for the said period, out of which two issued were accepted by the Appellant and required tax was paid, however, for the remaining two issues the Appellants had submitted their response to the notice and the matter has not been taken to the logical end.
  • However, in the meanwhile the other two wings of the department i.e., Anti-Evasion wing as well as the Range Office have also proceeded against the appellants by issuing notices for the very same period for which audit proceedings under Section 65 of the Act has already commenced.

On the other hand, it was submitted on the behalf of the respondents that three wings of the department proceeded against the appellants, as the Range Office and Anti- Evasion were not aware of the proceedings initiated by the Audit Commissionerate.

Held: –

  • The Hon’ble Court after considering the submissions made and facts of the case, found that it is quite evident from the records placed before this Court, that three wings of the department proceeded against the appellants for the very same period e., financial years 2017- 2018, 2018-2019 and 2019-2020.
  • Further, the first department who took the action against the appellants was Audit Commissionerate and issued notice dated 9th November, 2021 under Section 65 of the CGST Act, 2017, to which the appellants duly responded and furnished the details as sought in the said notice and also responded to the intimation dated 5th January, 2022 / 6th January, 2022 for conducting GST audit.
  • Thereafter the Hon’ble Court found that it is not clear as to why in the present days of electronic communications available in the department, such parallel proceedings can be conducted by three wings of the same department for the very same period.
  • The Hon’ble Court with the above, held that since the audit proceedings under Section 65 of the Act, that proceedings should be taken to the logical end. The proceedings initiated by the Anti Evasion and Range Office for the very same period shall not be proceeded with any further.

 The Hon’ble Court with the aforesaid findings, allowed the appeal filed by the Appellant along with connected application, setting aside the order of Single Bench with the directions to the first and the fourth respondent to issue show cause notice to the appellant within six weeks of the receipt of the server copy of the order, providing the opportunity of personal hearing to the appellant and the opportunity to submit its reply with relevant documents, and a speaking order be passed subsequently in accordance with law. It was also directed to the second and third to restrain from proceeding against the appellants for the very same period for which already action has been initiated by the first and fourth respondents i.e., for the financial years 2017- 2018, 2018-2019 and 2019-2020.  However, it was made clear that the above direction is confined only for the period covered for the financial years 2017- 2018, 2018- 2019 and 2019-2020. If there are any other material required by the second and third respondents for a department assessment period, it will be well open to them to put the appellants on notice in that regard.

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