M/S. Rp Buildcon P. LTD. And Anr. vs. Supdt. CGST And Ors.

Held

The Court allowed the appeal, setting aside the order of the learned Single Bench. The Court found it inappropriate for three wings of the same department to proceed against the appellants for the same tax period (financial years 2017-2018, 2018-2019, and 2019-2020) when audit proceedings under Section 65 of the CGST Act, 2017, had already commenced. The Court reasoned that since the audit proceedings had begun, they should be taken to their logical conclusion. The Court directed the first and fourth respondents (Superintendent, CGST & CX, Circle – II, Kolkata Audit – I Commissionerate and Superintendent, CGST & CX, Range – III, Barrackpore Division, Kolkata North Commissionerate, respectively) to issue a fresh show cause notice to the appellants within six weeks, provide an opportunity for reply and personal hearing, and then pass a speaking order on merits within three weeks of the hearing's conclusion. The second and third respondents (CGST & CX Headquarters, Anti Evasion, Kolkata North Commissionerate and others) were restrained from proceeding further against the appellants for the specified period. The Court clarified that this direction was confined to the mentioned financial years and did not preclude the respondents from initiating action for other periods if necessary.

Facts

The appellants, M/s. R. P. Buildcon Private Limited & Anr., filed a writ petition challenging notices issued by the CGST and CX Headquarters, Anti Evasion, and the Superintendent of CGST & CX, Range – III, Barrackpore Division, for the financial years 2017-2018 to 2019-2020. These notices were issued for the same period for which an audit under Section 65 of the CGST Act, 2017, had already been conducted by the Superintendent of CGST & CX, Circle – II, Kolkata Audit – I Commissionerate. The appellants sought to quash these notices and prevent further scrutiny under Section 61 of the CGST Act, 2017, after an audit under Section 65 had commenced. The learned Single Bench dismissed the writ petition, viewing the proceedings as show cause notices. Aggrieved, the appellants filed this intra-Court appeal.

Key Issues

1. Whether the issuance of notices by the Anti Evasion wing and the Range Office for the financial years 2017-2018 to 2019-2020 is permissible when an audit under Section 65 of the CGST Act, 2017, has already been conducted for the same period. Petitioner's arguments: The appellants contended that parallel proceedings by different wings of the department for the same tax period are impermissible and vexatious, especially when an audit under Section 65 has already been initiated and is in progress. They argued that once an audit under Section 65 has commenced, further scrutiny under Section 61 for the same period should not be undertaken by other authorities. They relied on the principle that a taxpayer should not be subjected to multiple inquiries for the same period by different branches of the same department. Revenue's arguments: The respondents, through the learned standing counsel, submitted that the parallel proceedings occurred because the Range office and the Anti Evasion wing were unaware of the ongoing audit proceedings initiated by the Audit Commissionerate. They did not present any specific legal arguments against the appellants' contention regarding the permissibility of parallel proceedings.