Consolidated SCN For Multiple FYs; Justified? Case Digest
Consolidated SCN For Multiple FYs; Justified? Case Digest
To what extent is a single consolidated Show Cause Notice (SCN) covering multiple financial years legally defensible has been active debate. In an effort to ensure a more efficient enforcement process, the tax Department will often issue a consolidated SCN, citing potential shortfalls in tax for several years. Taxpayers have resisted such practice, citing concerns about procedural fairness, the obligation to provide the defence of natural justice and the level of detail surrounding the allegations made per financial year.
This digest looks at the perceptions of the courts surrounding the legality of consolidated SCNs and key decisions with regard to whether such a practice complies with principles of tax law and statutory compliance. This digest will be of interest to all professionals navigating SCN filings and or appeals and defence to departmental determinations under the GST.
Delhi High Court
Income Allegedly Escaped Assessment In Different AY Can’t Be Consolidated To Meet Rs. 50 Lakhs Threshold Limit: Delhi High Court
The Delhi High Court has held that income alleged to have escaped assessment in different assessment years cannot be consolidated to meet Rs. 50 lakhs threshold limit under section 149 of the Income Tax Act.
India News Challenges Rs. 6.15 Crore GST Demand In One SCN For Different FYs: Delhi HC Directs GST Dept To Upload Separate DRC-07s
The Delhi High Court has directed the GST department to upload separate DRC-07s in a case where India News has challenged Rs. 6.15 Crore GST demand in one show cause notice (SCN) for different financial years (FYs).
Bombay High Court
Bombay High Court Stays Rs. 71.23 Crore GST Demand Based On 4 Years Consolidated Notice
The Aurangabad bench of Bombay High Court has stayed Rs. 71.23 Crore GST demand based on 4 years consolidated notice.
The bench of Justice S. G. Mehare and Justice Shailesh P. Brahme has observed that there is a prima facie material to stay the demand as issuing consolidated notice is impermissible and it goes to the hook of the jurisdiction. Taxing double for the same thing, is prima facie unjustifiable and since the product for which the GST sought is industry base, it is not taxable.
Karnataka High Court
Practice Of Issuing Single/Consolidated Show Cause Notice For Multiple Assessment Years Contravenes Provisions Of CGST Act: Karnataka High Court
The Karnataka High Court has held that the practice of issuing a single, consolidated show cause notice for multiple assessment years contravenes the provisions of the CGST Act.
GST Dept. Can’t Issue Single SCN For Multiple Assessment Years: Karnataka High Court
The Karnataka High Court has held that the GST department’s practice of issuing a single and consolidated show cause notice (SCN) for multiple assessment years contravenes the provisions of the Central Goods and Service Tax Act, 2017 (CGST Act).
Kerala High Court
Consolidated Notice Leads To Higher Pre-Deposit For Preferring Appeal: Kerala High Court
The Kerala High Court has held that the a consolidated notice would also result in a consolidated adjudication order covering several financial/assessment years and in the event of it being adverse to the assessee, the fee/pre- deposit required to be paid by an assessee for preferring a statutory appeal would also be higher.
Consolidated GST SCN Covering Multiple FYs Valid If Common Adjudication Period Exists: Kerala High Court
The Kerala High Court has held that consolidated show cause notices under GST covering multiple financial/assessment years can be issued only in circumstances where common period for initiation and completion of the adjudication.
Mariya is the Senior Editor at JurisHour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
