GST Act Does Not Permit Duplicate Proceedings: Madras HC Permits to Include Differential Amount in Original Proceedings if Provision Allows [Read Order]

“There is no scope for duplication of assessment proceedings under the Scheme of the enactment” said the Madurai Bench of the Madras High Court while allowing a writ petition challenging the Section 73 order under GST ( Goods and Services Tax ) after S. 74 proceedings.

The Court quashed the second assessment order issued under Section 73 of the GST Act, observing that an earlier order had already been passed under Section 74 for the same period, and directed that any differential tax liability must be addressed through the original proceedings, subject to statutory permissibility.

The petitioner, Tvl. Sri Ramakrishna Agencies, challenged the impugned assessment order dated 20.08.2024, issued under Section 73 for the tax period April 2019 to March 2020. The grievance stemmed from the fact that the petitioner had already been subjected to an assessment order under Section 74 of the Act for the same period on 16.12.2023.

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That the earlier assessment had resulted in a confirmed demand of ₹26,09,208 (SGST and CGST combined), alongside a matching penalty and interest amounting to ₹17,17,788, based on discrepancies between GSTR-3B and GSTR-7 returns.

An appeal was already pending before the Appellate Commissioner under Section 107, with the petitioner having deposited a pre-requisite amount of ₹2,60,922 on 28.03.2024.

Justice C. Saravanan, noted the statutory bar against initiating parallel or duplicate proceedings for the same cause of action. The Judge observed that once proceedings under Section 74 (involving fraud, wilful misstatement, or suppression of facts) have been initiated and culminated in an order, another proceeding under Section 73 (which deals with other than fraudulent instances) cannot be simultaneously initiated for the same period and issue.

The court allowed the writ petition and quashed the second assessment order. It granted liberty to the GST authorities to include any differential tax amount in the original proceedings provided the provisions of the Act permitted such an inclusion.

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