Facts of the Case:

In this case, the petitioner challenged the impugned order passed by the Sales Tax Officer pursuant to an SCN, raising a demand of ₹53,46,391 for FY 2019–20 under SGST, CGST, and IGST. Earlier, a notice under Section 61 was issued , highlighting discrepancies between ITC in GSTR-2A, ITC claimed in GSTR-3B, and tax liability in GSTR-1. The petitioner submitted a detailed reply with supporting documents. Subsequently, the proper officer accepted the explanation and closed the scrutiny through FORM GST ASMT-12, recording that the submitted documents were satisfactory. Despite this, a fresh DRC-01 under Section 73 , raising the same demand for the same tax period and grounds. The petitioner contended that this violated Section 61(2), which bars further action once explanations are accepted.

Issue:

Whether the GST authorities can issue a show-cause notice under Section 73 and reopen tax liability for the same period and on the same grounds after scrutiny proceedings under Section 61 have been concluded by accepting the taxpayer’s explanation under ASMT-12

Held that:

The Delhi High Court observed that Section 61(2) clearly provides that when the explanation furnished by a registered person is found acceptable, “no further action shall be taken in this regard.” The Court held that the term “further action” necessarily includes the issuance of a notice under Section 73 on the same discrepancies. The Court found that the earlier scrutiny proceedings were conclusively closed through ASMT-12 on 26 April 2023, and therefore, the Revenue could not reopen them by way of Section 73 proceedings based on the same grounds. Notably, Section 73 contains no non-obstante clause enabling the department to override the closure under Section 61(2). Thus, a second round of proceedings on identical issues could not be sustained.

The Court relied on the Rajasthan High Court ruling in Goverdhandham Estate Pvt. Ltd., which categorically held that once an explanation under Section 61 is accepted, the department cannot invoke Section 73 on the same issues. Similarly, the Madras High Court in Radiant Cash Management Services Ltd. held that an assessment order resurrecting the same demand after ASMT-12 is unsustainable.

The demand raised in the impugned order was based on precisely the same transactions and discrepancies earlier adjudicated and accepted under Section 61; hence, the proceedings were without authority of law.

Accordingly, the Court quashed the SCN and the consequential order. However, noting the delay in filing the petition. 

Case Name: KEMEXEL ECOMMERCE PVT. LTD. v. SALES TAX OFFICER CLASS II / AVATO WARD 105, ZONE 4, DELHI dated 31.10.2025