Part-2: The Science Behind Drafting a Reply To Show Cause Notice in GST
Thoughts, Insight and Research by: Abhishek Raja Ram, 9810638155
4. Bunching of Multiple Years
4.1 Many times, the Department issues SCN for multiple Financial Years. This is usually done to benefit from the extended time period. While doing so, the Department conveniently ignores the time limitation for individual years.
4.2 Where bunching of show cause notices for multiple assessment years under Section 73 of CGST Act had exceeded individual three-year limitation period for each year, High Court held such bunching invalid, directing separate adjudication for each year.
Madras High Court in Tital Company Ltd. vs Joint Commissioner of GST and Central Excise (2024) 15 CENTAX 118
5. Right to Cross Examine
5.1 If the ITC is disallowed due to the supplier's retrospective registration cancellation, the buyer may request a cross-examination of the cancelled dealer.
5.2 The Officer should not deny the right to cross-examine in such cases. This is needed to establish the genuineness of the transaction.
5.3 Where State GST authorities were directed to provide legible copies of analysis report and permit petitioner to cross-examine certain respondents before passing assessment orders, in view of fact that personal hearing was fixed without giving opportunity of cross-examination, petitions were to be disposed of permitting cross-examination.
Madras High Court in Shree Parshwanath Corporation (2024) 85 GSTL 207
5.4 Where in compliance to High Court's order, documents on basis of which tax fraud was alleged were supplied to assessee but neither opportunity of hearing nor opportunity to cross-examine persons making statement was provided, demand order was to be quashed.
Allahabad High Court in Savita vs Union of India (2024) 24 CENTAX 409
5.5 Since proper officer did not summon witnesses on account of paucity of time, impugned order to limited extent of denial of input credit tax in respect of cancelled dealers, could not be sustained.
Delhi High Court in Akshit Petrochem Pvt. Ltd. vs Government of NCT of Delhi (2024) 8 CENTAX 126
6. Parallel Proceedings on the same issue
6.1 Section 6 of CGST Act deals with the concurrent jurisdiction of Officers.
6.2 Sec. 6(2)(b): If the CGST Authority initiates proceedings, no parallel proceedings should be initiated by the SGST Authorities.
6.3 Where the central authorities had already initiated a proceeding in which the assessee had duly participated, proceedings and orders passed by State authorities subsequently in respect of the same tax period and subject matter were to be set aside.
Calcutta High Court in Baazar Style Retail Ltd. vs Deputy Commissioner of State Tax (2024) 22 CENTAX 99
6.4 CGST authorities cannot proceed if the same subject matter is under SGST investigation; thus, the blocked credit ledger and summons by CGST must be set aside due to SGST's prior initiation.
Himachal Pradesh High Court in Kundlas Loh Udyog vs State of HP (2024) 22 CENTAX 455
This was part-2 of this series. I hope you must have found this write-up useful.
Thanks & Regards
Abhishek Raja Ram
9810638155