Case Law Details
Jayanthi Plastics (Defunct) Vs Deputy State Tax Officer-2 (Madras High Court)
The legal battle between Jayanthi Plastics and the Deputy State Tax Officer-2 has taken a significant turn with the Madras High Court’s recent ruling. In contention is the validity of a show cause notice dated 28.12.2023, which raises issues previously addressed in an order dated 23.12.2023.
The crux of the matter lies in the repetition of issues between the two notices. The petitioner argues that the subject matter of the impugned notice was already adjudicated upon in the earlier order. Specifically, the discrepancy in output tax liability between GSTR-1 and GSTR-3B returns formed the basis of both the previous order and the subsequent notice.
Legal counsel for the petitioner asserts that once an issue is settled through an assessment order, it cannot be revisited in a subsequent notice. This principle safeguards against redundant litigation and ensures the finality of judgments.
On the other hand, the Government Advocate representing the respondent contends that the show cause notice stemmed from a scrutiny process and covers multiple issues, including those previously addressed.
The Madras High Court meticulously reviewed the documents and concluded that the impugned notice indeed revisited an issue already determined in the earlier order. Consequently, the court ruled that such action is impermissible, thereby disposing of the case. In light of the Madras High Court’s ruling, it is established that reopening an already decided issue in a subsequent notice is not permissible.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Show cause notice dated 28.12.2023 is challenged on the ground that one of the issues raised therein, i.e. difference in output tax liability between GSTR-1 and GSTR-3B returns, was the subject of order dated 23.12.2023.
2. The petitioner states that an order dated 23.12.2023 was issued in respect of difference in output tax liability as between the petitioner’s GSTR-1 and GSTR-3B returns. In these circumstances, the present writ petition was filed because a show cause notice dated 28.12.2023 was issued in respect of three issues, including reconciliation of GSTR-1 and GSTR-3B.
3. Learned counsel for the petitioner referred to the earlier order dated 23.12.2023 and pointed out that the tax proposal in respect of the said discrepancy was confirmed by such order and that the petitioner intends to challenge such order by separate proceedings. Once an issue is decided by an assessment order, learned counsel contends that the same issue cannot be re-opened in the impugned show cause notice.
4. Mr. K. Vasanthamala, learned Government Advocate, accepts notice for the respondent. She submits that the show cause notice was issued pursuant to a scrutiny. She also points out that such notice has been issued by the Deputy Commercial Tax Officer and that it covers three issues.
5. On examining earlier order dated 23.12.2023 and the impugned show cause notice, it is clear that they pertain to assessment period 2018-19. The first issue in the impugned show cause notice is the same issue determined under order dated 23.12.2023. Undoubtedly, it is not open to the respondent to reopen the same issue after issuing the order dated 23.12.2023.
6. In these circumstances, W.P.No.10482 of 2024 is disposed of by directing the petitioner to respond to the show cause notice only insofar as it pertains to the issues of under declaration of ineligible ITC and invalid ITC under Section 16(4). As regards the issue relating to reconciliation of GSTR-1 and GSTR-3B, the impugned show cause notice is set aside to that extent. It is made clear that all contentions are left open to the petitioner while responding to the show cause notice. Consequently, connected miscellaneous petitions are closed. No costs.
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