BRIEF FACTS OF THE CASE:

A departmental audit was conducted in case of M/s Bhagwati Woven Pvt Ltd. (appellant) for the period 2020-21. Further, the appellant received ASMT-10 for the period F.Y. 2020-21 in which various discrepancies were communicated to the appellant. Discrepancies communicated were as follows:

Input tax credit mismatch between GSTR-2A and GSTR-3B;
Claim of ITC in respect of taxpayers whose registration has been cancelled retrospectively;
Whether the registered person has made reversals of ITC in accordance with provisions of Rule 42 and Rule 43 of the CGST Rules; and
Interest Liability on account of late filing of GSTR-3B as provided under Section 50 of CGST Act 2017.

Consequently, a Show Cause Notice was issued to the appellant on the basis of ASMT-10 discrepancies. CA Pradeep Jain, learned legal consultant of the noticee gave a detailed reply against the SCN and thereby majority demand of tax in respect of Issue No. 1 was dropped. For the remaining discrepancies which were confirmed by Order-in-Original, appellant preferred an appeal before the Commissioner (Appeals).
CA Pradeep Jain, learned representative of the Appellant appeared for the personal hearing to present the submissions and relevant explanations on behalf of the Appellant.

Key issues covered in the case:

Whether department officials can initiate parallel proceedings on same subject matter for the same period which were concluded earlier?
Whether such proceedings initiated can be held valid?

Submissions by Appellant:

CA. Pradeep Jain learned legal counsel of Appellantsubmitted the following: -

The difference has arisen since the ITC pertaining to the purchase made from SEZ unit was mistakenly shown in “All other ITC” while filing GSTR-3B and presented a detailed reconciliation of ITC. Hence, it is contended that there was no excess availment of ITC. Allegation by the SCN is invalid as the difference has arisen only due to clerical mistake.
It was argued that, in respect of allegation raised by SCN in the issue of
Claim of ITC in respect of supplies from taxpayers whose registration have been cancelled retrospectively,
Interest Liability in terms of Section 50 of CGST Act 2017.

It was held that the discrepancies raised were already settled during the Departmental Audit conducted for the disputed period. Hence, fresh proceedings initiated for same subject matter and same period stands invalid.

It was argued that while computing the demand the impugned order has considered the entire ITC availed by them. However, as per Rule 42 and 43, reversal is required only on the common ITC. Thus, contention of the impugned order is invalid. A detailed working was also presented.

Judgement & Findings:

Based on the submissions given by legal counsel, the Appellate Authority observed the following findings: -

It was observed that as per Section 6(2)(b) of CGST Act 2017
what is barred is parallel or subsequent proceedings on the same subject matter
by a proper officer
for the same period
under different provision

Hence, it was held that the audit under Section 65 of CGST Act was already conducted for the period 2018-19 to 2022-23 in respect of the subject matter of RCM on inward supplies, RCM on GTA, ITC reversal on credit notes which are raised by the SCN, Reversal of ITC under Rule 42 and 43. Therefore, these discrepancies are mirror discrepancies raised by the impugned order under Section 74, hence, the proceedings raised by the impugned order in this matter should be dropped.

However, in respect of interest liability on account of late filing of GSTR-3B it was held that this subject matter was not raised in internal audit and therefore, held it was payable.

Therefore, it was held that the proceedings initiated as per impugned order should be dropped except one discrepancy.

Case Laws Relied upon in the case study

M/s Armour Security (India) Ltd. Commissioner v. CGST, Delhi East Commissionerate & Anr [2025 (8) TMI 991]
R.P. Buildcon Pvt Ltd v. Superintendent, CGST & Central Excise (2022)
Vivaa Tradecom Pvt Ltd v. State of Gujarat [2021 (44) G.S.T.L. 118 (Guj.)]
Suncraft Energy Private Limited and Another v. Assistant Commissioner [Appeal No. 1218 of 2023]
Diya Agencies v. State Tax Officer, State GST department, Kayamkulam[2024 (82) G.S.T.L. 169 (Ker.)]

AUTHOR’s COMMENT:

The Judgment given in the instant case is a very welcoming judgement as it reinforces Section 6(2)(b) provisions that a matter for a disputed period which is already a subject matter cannot be taken up by any other officer and initiate a fresh proceeding on that issue which was already concluded earlier.
Further, this decision protects genuine taxpayers from the parallel proceedings which department officials initiate and demand double tax from the taxpayer on the same subject matter for the same period. This judgement reinforces principle laid down by judicial pronouncements given by various courts in the past on the same analogy.

Comments

PJ case law/2026-27/04