Show-cause notices under Sections 73 and 74 of the WBGST/CGST Act can coexist for the same tax period if based on distinct grounds, and petitioners must pursue available appellate remedies before seeking writ relief.

JUDGMENT :

Raja Basu Chowdhury, J.

1. The present writ petition has been filed, inter alia, challenging the order passed under Section 73 of the WBGST /CGST Act, 2017 (hereinafter referred to as the “said Act”) dated 19^th July 2024. Although, the writ petition seeks to challenge several issues, however, the petitioner has confined the challenge to the order under Section 73 of the said Act. According to Mr. Shraff, learned advocate appearing for the petitioner, if the challenge succeeds, then the show cause notice based on which the aforesaid order has been passed also cannot be sustained.

2. The petitioner is engaged in the business of retail of ferrous waste and scrap, remelting scrap ingots. According to the petitioner, a proceeding had been initiated under Section 74 of the said Act on the basis of a show cause dated 29^th April 2022 in respect of the tax period April 2019 to March 2020. The said proceeding culminated in the order passed under Section 74 of the said Act dated 20^th October 2022. Perusal of the aforesaid order would demonstrate that the petitioner had made voluntary payment upon receipt of the show cause notice which had been accounted for and consequent thereupon, the differential amount of tax, interest and penalty had been levied. The petitioner claims to have preferred an appeal from the aforesaid order under Section 107 of the said Act, which culminated in the order dated 27^th December, 2023, whereby the appeal filed by the petitioner stood rejected and the determination confirmed. The petitioner has, however, not challenged the aforesaid appellate order. According to the petitioner since the appellate tribunal is yet to be constituted, the petitioner has not questioned the same.

3. Subsequently, in respect of the self same period, a notice under Section 73 of the said Act had been issued. The petitioner is aggrieved by the inclusion of the claim of ITC availed on inward B2B supply (Including Debit Notes and Amendment) in Table 4(A)(5) of GSTR-3B. According to the petitioner, the aforesaid figure had already been included in the order passed under Section 74 of the said Act dated 20^th October, 2022. As such, the same once again could not have been included in the aforesaid show cause issued under Section 73 of the said Act. The petitioner is also aggrieved by the inclusion of demand for short payment of output tax on outward supply to the extent of Rs.27,178.38/-, each for CGST & SGST which has again been included in the show cause. Independent of the above, the petitioner also seeks to question the demand on account of reverse charge mechanism, inter alia, on the ground that the said demand is vague. No particulars have been disclosed.

4. The other point raised by the petitioner which is more of a preliminary point though argued later is with regard to the very issuance of the show cause notice under Section 73 of the said Act. According to the petitioner once, a show-cause notice under Section 74 of the said Act is issued, no further show-cause notice can be issued for the self-same period. On such ground as well the instant writ petition should succeed.

5. Mr. Siddiqui, Learned Senior Advocate and Additional Government Pleader at the very outset, submits that the scope of issuance of show-cause notice under Sections 73 and 74 of the said Act are entirely different. While the proceedings under Section 74 of the said Act is based on misrepresentation and fraud, such is not the basis for issuance of notice under Section 73 of the said Act. Insofar as the issue of non-disclosure of particulars of reverse charge mechanism (RCM) is concerned, Mr. Siddiqui has placed reliance on the form GSTR-1 and submits that the details of outward supply are all reflected thereat which also includes the HSM Code. The allegations of the petitioner as regards vagueness are unfounded. No reliance be placed on the same. On the issue of non-consideration of ITC availed on inward B2B supply (Including Debit Notes and Amendment) in Ta