The court determined that prior dismissal of proceedings under Section 61 does not prevent initiation of actions under Section 74 when fraud is alleged, affirming legislative intent regarding fraud investigations.

JUDGMENT :

Raja Basu Chowdhury, J.

1. The instant writ petition has been filed, inter alia, challenging the order in original dated 28th January, 2025 passed by the respondent no.1 under the provisions of WBGST/CGST Act, 2017 (hereinafter referred to as the “said Act”), for the tax period 2017-18 to 2018-19.

2. The petitioner claims to be an individual who was a registered tax payer under the provisions of the said Act and continued to be so until 4th February, 2023.

3. It is the petitioner’s case that during the period the petitioner was registered under the provisions of the said Act, a proceeding was initiated under Section 61 of the said Act, which ultimately came to be dropped on the basis of the response filed by the petitioner, vide an order dated 9th March, 2023.

4. Subsequently, on 5th August, 2024 the petitioner claims to be shocked to have received the show cause issued under Section 74 of the said Act in respect of the tax period 2017-18 to 2018 -19.

5. Mr. Shraff, learned advocate appearing in support of the writ petition would strenuously contend that once a proceeding had been initiated by the respondents and the same had been dropped, no further proceedings could have been initiated by the respondents in respect of the selfsame period. He has drawn attention of this Court to the notice issued under Section 61 of the said Act, the response filed by the petitioner in Form ASMT 11 and the consequential order issued by the proper officer dropping the proceedings in ASMT 12.

6. In support of his aforesaid contention that the proper officer having not initiated any consequential proceedings by falling back to Section 61(3) of the said Act, no further notice under Section 74 of the said Act could have been initiated, he has placed reliance on a judgment delivered by the Hon’ble High Court of Punjab and Haryana in the case of J.S.B Trading Co. v. State of Punjab , reported in (2024) 169 taxmann.com 9 (Punjab & Haryana).

7. Independent of the above, he would submit that it is well settled that in respect of the selfsame cause repeated show cause notices cannot be issued. In support thereof, he has relied on the judgment delivered by the Hon’ble Supreme Court in the case of Commissioner of Central Excise Meerut-II v. Prince Gutka Ltd. , reported in 2015 (322) E.L.T. 165 (S.C.) and the case of Duncans Industries Ltd., v. Commissioner of Central Excise, New Delhi , reported in (2006) 2006 taxmann.com 1489. In the context as noted hereinabove, he would submit that although, the petitioner has participated in the proceedings and raised the aforesaid contention, the appropriate authority has not considered the same. Since, this is a point of law, the petitioner has approached this Court by invoking the extra ordinary writ jurisdiction.

8. Mr. Kundalia, learned senior advocate appears on behalf of the CGST authorities. At the very outset, he has drawn the attention of this Court to the fact that the proceedings under Section 61 of the said Act and the proceedings under Section 74 stand on a different footings. By drawing attention of this Court to the show cause notice issued under Section 74 of the said Act he would submit that the circumstances under which such show cause notice has been issued has already been detailed in the show cause notice itself. The proceedings under Section 74 of the said Act cannot be set at naught by this Hon’ble Court in exercise of its extra-ordinary writ jurisdiction, especially when an adjudication order in that regard has been passed. The petitioner has an alternative remedy available before the appellate authority. The petitioner having not approached such authority, no relief should be afforded to the petitioner.

9. Heard the learned advocates appearing