Show Cause Notice for the same period by two different officers of same jurisdictional officer

Case Title: Dinesh Kumar Varma v. Sales Tax Officer, AVATO, Delhi

Court: High Court of Delhi

Petition No.: W.P. (C) No. 5487 of 2024, CM Appl. No. 22593 of 2024

Relevant Sections: Section 73 and Section 75(3) of the CGST Act, 2017

Category of Dispute: Recovery of Tax / Demand Order – Natural Justice / Duplicate Adjudication

Date of Judgement: April 22, 2024

Facts of the Case

[Para 1-3]

• The petitioner challenged the demand order dated 25.12.2023 issued under Section 73 of the CGST Act, 2017, which adjudicated a show cause notice (SCN) dated 21.09.2023 and imposed a tax demand of ₹15,53,240/-.
• He claimed he was unaware of this SCN and had not filed a reply.
• He later discovered another order dated 17.12.2023 that adjudicated a second SCN dated 24.09.2023—issued for the same tax period (July 2017 to March 2018)—and also raised a nearly identical demand of ₹15,53,234/-.
• Both orders were passed by different officers of the same jurisdictional office (AVATO, Ward-93, Zone-B, Delhi).

Questions in Consideration

[Para 3-4]

• Can two separate officers from the same jurisdiction pass orders for the same tax period, issuing identical demands on two separate SCNs?
• Whether the principle of natural justice is violated due to the absence of the petitioner’s reply and the duplication of adjudication?

Observation of the Court

[Para 4]

• The Court noted that both SCNs and orders pertain to the same tax period and involve nearly identical demands by two different officers from the same jurisdiction.
• It also acknowledged the petitioner’s contention that no reply could be filed due to lack of awareness.
• Given the duplication and lack of opportunity to respond, both the adjudication orders dated 17.12.2023 and 25.12.2023 were held unsustainable.

Judgement of the Court

[Para 4-6]

• Both orders dated 17.12.2023 and 25.12.2023 were set aside.
• The two SCNs dated 21.09.2023 and 24.09.2023 were clubbed together for a single re-adjudication by one proper officer.
• The petitioner was granted 30 days to file replies to the SCNs.
• The re-adjudication is to be conducted within the period prescribed under Section 75(3) of the CGST Act, 2017.
• The Court did not express any opinion on the merits and reserved all rights and contentions of the parties.

Between Fine Lines

• Two near-identical tax demands were issued by different officers for the same period, which raised serious concerns of duplicative adjudication.
• The petitioner was denied the opportunity to respond due to lack of awareness.
• The High Court found this in violation of procedural fairness and set aside both orders.
• Fresh adjudication has been ordered through consolidation of both SCNs by one competent officer.
• It reaffirms the requirement for fairness, non-duplication, and adherence to natural justice in GST proceedings.

Summary of Referred Cases

(No other cases were referred to or cited in this judgement.)

Takeaway:

“Twin Demands, One Tax Period – A Case of Duplicated Justice”