The High Court cannot adjudicate taxation matters in stages and must adhere to the complete adjudication process as prescribed by the CGST Act.

JUDGMENT

Easwaran S., J.

This intra-court appeal is preferred by the State aggrieved by the judgment dated 22.11.2024 of the learned Single Judge in WP(C) No.40226/2024.

2. The brief facts for the disposal of the appeal are as follows:

The 1^st respondent herein (assessee), approached the writ court by filing the writ petition challenging Ext.P1 show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017 / State Goods and Services Tax Act, 2017 . The assessee is engaged in the business of sale of gold, silver and diamond ornaments. On 25.5.2023, the appellant conducted a search in the premises of the writ petitioner and collected certain data from the software “Gold Mine”, which was used by the assessee for billing purposes. Later, a notice was issued requiring the assessee to show cause as to why an amount of Rs.4,88,56,298/- shall not be assessed as short paid on detection of suppression of outward supply for the periods 2017-18 to 2023-24 and a further amount of Rs.11,85,843/- shall not be imposed as flood cess. Pointing out various discrepancies in the notice to show cause, the assessee preferred Ext.P2 reply. Placing reliance on the judgment dated 12.9.2024 in WP(C) No.31434/2024, the petitioner approached the writ court mainly seeking the following relief:

“i. Issue a writ in the nature of certiorari, or any other appropriate writ, order or direction, quashing Exhibit P1 show cause notice;”

3. The learned Single Judge who considered the writ petition ordered that the authorities under the SGST Act, 2017 will consider the preliminary issue raised by the petitioner against the invocation of Section 74 thereof, especially with regard to the contention of the petitioner/assessee that a part of the alleged suppressed turnover belongs to a separate entity belonging to her husband with a separate registration. Aggrieved by the above finding, the State is before us in this appeal contending primarily that the scheme of the CGST Act/SGST Act does not envisage separate orders being passed in the nature which has been directed by the learned Single Judge.

4. Heard Smt.Resmitha Ramachandran, the learned Government Pleader and Sri.Akhil Suresh, the learned counsel appearing for the respondent/writ petitioner.

5. The question to be considered by us is whether the direction of the learned Single Judge can be sustained in the light of the statutory scheme envisaged under CGST Act/SGST 2017. Section 74 (1) of the CGST Act/SGST Act authorises the proper officer to issue a notice to show cause. Sub-Section (2) of envisages that such notice shall be issued six months prior to the time limit specified under sub-Section (10) of . The power of adjudication conferred on the proper officer is under sub-Section (9) of , which reads as under:

“74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful misstatement or suppression of facts.

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(9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order.”

It is also the mandate of the statute that the proper officer shall issue the order under sub-Section (9) of Section 74 within a period of five years from the due date of submission of the annual return.

6. When the statutory provisions under Section 74 of the CGST Act/SGST Act is read altogether, we find that there is no provision enabling either the assessee to claim adjudication in stages nor has any power being conferred upon the proper officer to adjudicate the lis in s