A2Z Taxcorp LLP

A single SCN cannot be issued for multiple periods

The Hon’ble Madras High Court in the case of M/s. Uno Minda Limited (Seating Division) v.
The Joint Commissioner of GST and Central Excise [Writ Petition No. 27776 of 2024 and WMP
Nos. 30288 &30287 of 2024 dated September 23, 2024] sets-aside bunching of Show Cause
Notice (“SCN”) issued for various AYs to split the SCNs for each AYs, allowing the Assessee to
avail benefit of Amnesty Scheme proposed to be launched during November 2024, that would
waive interest as well as penalty on tax liability.

Facts:

M/s. Uno Minda Limited (Seating Division) (“the Petitioner”) was engaged in sale of two-
wheelers. The Joint Commissioner (“the Respondent”) served a Show Cause Notice dated July
25, 2024 (“the Impugned SCN”) was issued along with the summary Show Cuse Notice dated
August 05, 2024 under section 74 of the CGST Act starting from November 15, 2017 to October
31, 2023 (“the Impugned Period”).

The Impugned SCN demanded differential amounts stating that the Petitioner was engaged in
misclassification of two-wheeler seats under Customs Tariff Heading (“CTH”) 9401 instead of
CTH 8714 and the same resulted in alleged short payment of GST @18% instead of GST @ 28%
for the period between July, 2017 and October, 2023.

Hence, aggrieved by the Impugned SCN, the Petitioner filed the present writ petition.

Issue:

Whether a single SCN cannot be issued for multiple periods?

Held:

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The Hon’ble Madras High Court in Writ Petition No. 27776 of 2024 and WMP Nos. 30288
&30287 of 2024 held as under:

• Observed that, there was no willful misstatement made by the Petitioner and hence
the Impugned SCN was without jurisdiction and the two-wheeler seats manufactured
by the Petitioner are appropriately classifiable under CTH 9401 and not under CTH
8714.
• Relied on, Titan Company Ltd., v. the Joint Commissioner of GST & Central Excise,
Salem [2024- VIL-19-MAD] wherein the Madras High Court sets aside the bunching of
SCNs issued for separate years.
• Noted that, the deposit amount made by the Petitioner as tax liability to the extent of
Rs.1,24,74,14,950/- shall not be claimed to be refunded. Further, if the Respondent is
issuing separate SCN for six assessment years, the Petitioner will not raise the issue of
limitation. However, the Petitioner's intention is that only in the event of separate SCNs
being issued, the Petitioner will pay the tax liability and avail the AMNESTY scheme,
which is proposed to be launched by the Respondent from November 2024 and would
get the benefit of waiver of interest as well as penalty.
• Held that, the bunching of SCNs issued for separate years, in the present case, the
Impugned SCN may be split up regarding assessment years and separate notices may
be issued for each and every assessment year separately in order to avail AMNESTY
Scheme, which is proposed to be launched during November 2024. Hence, the writ was
disposed and Impugned SCN was set aside.

Our Comments:

Section 73 of the CGST Act governs “Determination of tax, pertaining to the period up to
Financial Year 2023-24, not paid or short paid or erroneously refunded or input tax credit
wrongly availed or utilised for any reason other than fraud or any wilful-misstatement or
suppression of facts.” Section 73(10) of the CGST Act states that the proper officer shall issue

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the order under 73(9) of the CGST Act within three years from the due date for furnishing of
annual return for the financial year to which the tax not paid or short paid or input tax credit
wrongly availed or utilised relates to or within three years from the date of erroneous refund.

The GST Council in its 49th meeting recommended that it may not be desirable to extend the
timelines in such a manner so that it may lead to bunching of last date of issuance of SCN/order
made under Section 73 and 74 of the CGST Act for a number of financial years and they have
extended the limitation period specified under Section 73(10) of the CGST Act, separately for
each financial year and accordingly, the time limit is extended.

Therefore, issuing bunching of SCN is against the spirit of provisions of Section 73 of the CGST
Act and the Constitution Bench of the Hon'ble Apex Court in the decision reported in The State
of Jammu and Kashmir and Ors. v. Caltex (India) Ltd. [(1966) 17 STC 612 (SC)] has held that
where an assessment encompasses different assessment years, each assessment year could be
easily split up and dissected and the items can be separated and taxed for different periods.
The said law was laid down keeping in mind that each and every Assessment Year will have a
separate period of limitation and the limitation will start independently and that is the reason
why the Hon'ble Supreme Court has held that each assessment year could be easily split up
and dissected and the items can be separated and taxed for different periods. The said principle
would apply to the present case as well.

The limitation period of three years would be separately applicable for every assessment year
and it would vary from one assessment year to another. It is not that it would be carried over
or that the limitation would be continuing in nature and the same can be clubbed. The
limitation period of three years ends from the date of furnishing of the annual return for the
particular financial year.

Similar, judgment was passed by the Hon’ble High Court of Karnataka in the case of M/s
Bangalore Golf Club v. Assistant Commissioner of Commercial Taxes [Writ Petition No. 16500

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of 2024 (T-RES)] and in the case of M/s Veremax Technologies Services Limited v. The Assistant
Commissioner of Central Tax [Writ Petition No. 15810 of 2024 dated September 4, 2024].

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