The Hon’ble Madras High Court in the case of Radiant Cash Management Services Ltd. v. The Commercial Tax Officer, Pondy Bazaar Assessment Circle [WP No. 49092 of 2025 and WMP Nos. 54840 & 54843 of 2025, order dated December 18, 2025] held that there is no statutory bar under the GST enactments for issuance of multiple Show Cause Notices (SCNs) under Section 73 for the same tax period if they address different discrepancies, even after quashing a prior SCN for the same period.
Facts:
Radiant Cash Management Services Ltd., (“the Petitioner”) filed reply dated September 19, 2025 to intimation in Form GST ASMT-10 dated August 22, 2025 issued by Respondent for tax period 2021-22. They earlier received intimation in Form GST DRC-01A dated May 6, 2025 for same period, and before the Petitioner replied to the same, the Respondent issued SCN in Form GST DRC-01 dated May 29, 2025 which was challenged by the Petitioner in WP No. 23660 of 2025 wherein this Court set aside the summary of said SCN and granted liberty to reply to DRC-01A within 3 weeks of receipt of order.
The Commercial Tax Officer (“the Respondent”) issued intimation in Form GST DRC-01A dated May 6, 2025 proposing discrepancies for 2021-22 and issued SCN in Form GST DRC-01 dated May 29, 2025 before the Petitioner replied to DRC-01A. Further they issued impugned SCN in Form GST DRC-01 dated September 23, 2025 (“impugned SCN”) under section 73 of the CGST Act, proposing demands on unreconciled turnover of Rs.7,65,815, and other allegations totalling tax of Rs.1,95,06,563, interest and penalty u/s 73, despite prior quashed SCN and pending DRC-01A reply.
The Petitioner contended that impugned SCN dated September 23, 2025 u/s 73 is without jurisdiction as issued in violation of this Court’s order dated July 31, 2025 in WP No. 23660 of 2025 setting aside prior SCN dated May 29, 2025 and directing reply to DRC-01A. They further contend that the scheme of Section 73 and Rule 142 precludes multiple assessment proceedings for same tax period and impugned SCN is impermissible violating natural justice.
The Respondent contended that impugned SCN addresses distinct discrepancies from prior proceedings i.e., the prior DRC-01A/SCN focused on ITC mismatch, ineligible ITC etc., while impugned SCN raises unreconciled turnover per GSTR-9/GSTR-9C vs GSTR-3B, exempted supplies per GSTR-9 vs GSTR-1/GSTR-3B, credit notes mismatch per GSTR-9 Table 4.1, with only minor overlap on exempt supplies Rs.19,001 which can be dropped post-adjudication and that there is no statutory bar to multiple SCNs for same period on different issues.
Aggrieved by the same, the Petitioner approached the Court by way of Writ Petition No. 49092 of 2025 under Article 226 of the Constitution praying certiorari to quash the SCN read with ASMT-10 dated August 22, 2025.
Issue:
Whether issuance of a fresh SCN in Form DRC-01 dated September 23, 2025 under Section 73 for tax period 2021-22 is without jurisdiction?
Held:
The Hon’ble Madras High Court in WP No. 49092 of 2025 and WMP Nos. 54840 & 54843 of 2025 held as under:
- Noted that, impugned SCN in Form DRC-01 dated September 23, 2025 issued under section 73 of the Act for 2021-22 pursuant to ASMT-10 dated August 22, 2025. The prior DRC-01A dated May 6, 2025 followed by SCN DRC-01 dated May 29, 2025 challenged in WP No. 23660/2025 and was set aside vide order dated July 31, 2025.
- Observed that, the comparison of quashed SCN dated May 29, 2025 with the impugned SCN shows only commonality in exempt supplies value Rs.19,001.
- Observed that, the prior quashed SCN and impugned proceedings address different issues except one item in comparison with the impugned SCN. Hence there is no scope to contend that there is multiple assessment proceedings in the same year as there is no statutory bar under section 73 or Rule 142 of the CGST Rules, 2017.
- Held that all the judgments relied on by the Petitioners are instances where overlapping SCNs for same facts/period by different officers were held to be impermissible. However, in the instant case, the factual matrix is different, as it involves different discrepancies/proceedings by same officer.
- Held that, principles of estoppel or res judicata do not strictly apply in tax laws and inapplicable as conspicuously absent in GST scheme.
- Held that, no bar to multiple SCNs for same period on separate issues and dismissed the writ petition.
Our Comments:
The Madras High Court reinforces that GST enactments constitute a complete code without statutory prohibition on multiple SCNs under section 73 or 74 for the same tax period, provided they pertain to distinct discrepancies, distinguishing Supreme Court in the case of Dancans Industries Ltd. v. CCE [(2006) 201 ELT 517 (SC)] limited to overlapping demands on identical facts by different officers leading to dual assessments which states that “there could not be two assessments for the same period”.
Relevant Provisions:
Section 73 of the CGST Act, 2017
Determination of tax, pertaining to the period up to Financial Year 2023-24, not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any willful-misstatement or suppression of facts.-
“(1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder.
(2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order.
(3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax.
(4) The service of such statement shall be deemed to be service of notice on such person under sub-section (1), subject to the condition that the grounds relied upon for such tax periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice.
(5) The person chargeable with tax may, before service of notice under subsection (1) or, as the case may be, the statement under sub-section (3), pay the amount of tax along with interest payable thereon under section 50 on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment.
(6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1) or, as the case may be, the statement under sub-section (3), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) or sub-section (3) pays the said tax along with interest payable under section 50 within thirty days of issue of show cause notice, no penalty shall be payable and all proceedings in respect of the said notice shall be deemed to be concluded.
(9) The proper officer shall, after considering the representation, if any, made by person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to ten per cent. of tax or ten thousand rupees, whichever is higher, due from such person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous refund.
(11) Notwithstanding anything contained in sub-section (6) or sub-section (8), penalty under sub-section (9) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax.
(12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.”
Rule 142 of the CGST Rules, 2017
“142. Notice and order for demand of amounts payable under the Act. –
(1) The proper officer shall serve, along with the
(a) Notice issued under section 52 or section 73 or section 74 or section 74A or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130, a summary thereof electronically in FORM GST DRC-01 ,
(b) statement under sub-section (3) of section 73 or sub-section (3) of section 74 or sub-section (3) of section 74A, a summary thereof electronically in FORM GST DRC-02 , specifying therein the details of the amount payable.
(1A) The proper officer may, before service of Notice to the person chargeable with tax, interest and penalty, under sub-section (1) of Section 73 or sub-section (1) of Section 74 or sub-section (1) of section 74A, as the case may be, communicate the details of any tax, interest and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A.;
(2) Where, before the service of Notice or statement, the person chargeable with tax makes payment of the tax and interest in accordance with the provisions of sub-section (5) of section 73 or clause (i) of sub-section (8) of section 74A, as the case may be, or tax, interest and penalty in accordance with the provisions of subsection (5) of section 74 or clause (i) of sub-section (9) of section 74A, or where any person makes payment of tax, interest, penalty or any other amount due in accordance with the provisions of the Act whether on his own ascertainment or, as communicated by the proper officer under sub-rule (1A), he shall inform the proper officer of such payment in FORM GST DRC-03 and an acknowledgement, in FORM GST DRC–04 shall be made available to the person through the common portal electronically.”
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