Facts of the Case
The petitioner challenged the demand order dated 28 August 2024 issued by the Sales Tax Officer, Delhi, pursuant to a show cause notice (SCN) dated 29 May 2024, raising a GST demand of Rs 53,46,391 for FY 2019–20. Earlier, the department had issued a scrutiny notice under Section 61 of the DGST Act on 6 February 2021 alleging discrepancies between ITC reflected in GSTR-2A, ITC claimed in GSTR-3B, and liability declared in GSTR-1. A reminder notice was also issued on 29 March 2021 seeking several documents. The petitioner submitted a detailed reply with all supporting records on 14 September 2021, and after examination, the GST department accepted the explanation and issued Form ASMT-12 on 26 April 2023, recording that the reply was satisfactory and the matter was closed. Despite this closure, the department again issued DRC-01 on 29 May 2024 on the same grounds and same transactions, culminating in the impugned demand order, prompting the petitioner to approach the Delhi High Court on the ground that fresh proceedings under Section 73 were impermissible once the initial discrepancies had been accepted under Section 61.
Petitioner’s Arguments
Section 61(2) clearly states that once the explanation is accepted, no further action can be taken.
The issuance of a second SCN under Section 73 on identical grounds is illegal, as the earlier discrepancies were already reconciled and closed via ASMT-12.
Section 73 does not contain a non-obstante clause; hence it cannot override Section 61(2).
The impugned order is without jurisdiction and a clear case of double jeopardy in tax proceedings.
Revenue’s Arguments
The department argued that:
The impugned order is appealable, and therefore, the petitioner should avail the statutory appellate remedy under the GST Act.
The writ petition should not be entertained directly by the High Court.
Court’s Analysis
The Court examined Section 61, Section 73, and relevant judgments from other High Courts.
Key Legal Findings
Under Section 61(2), when the taxpayer’s explanation is found satisfactory:
“No further action shall be taken.”
This creates a statutory bar on issuing a fresh SCN on the same grounds.
The Rajasthan High Court in Goverdhandham Estate Pvt. Ltd. (2024) held:
Once ASMT-12 is issued, the department cannot reopen the same issue for the same period and same facts.
The Madras High Court in Radiant Cash Management Services (2024) held:
Any further assessment or demand on the same grounds after issuance of ASMT-12 is unsustainable.
Since the petitioner’s reply had already been accepted and ASMT-12 issued, there was no basis for re-initiating proceedings under Section 73.
Section 73 lacks a non-obstante clause; hence it cannot override the finality attached to Section 61(2) proceedings.
Court’s Order
The Delhi High Court held that under Section 61(2) of the GST Act, once the taxpayer’s explanation regarding discrepancies is accepted and ASMT-12 is issued, no further action can be taken on the same issue, and therefore the department cannot initiate proceedings under Section 73 for the same period and same grounds. Relying on judgments of the Rajasthan High Court and Madras High Court, the Court observed that the statutory scheme prohibits reopening matters already closed under Section 61, especially when Section 73 does not contain a non-obstante clause to override Section 61(2). Consequently, the Court quashed both the SCN dated 29 May 2024 and the demand order dated 28 August 2024 as illegal and unsustainable. However, noting the petitioner’s delay in approaching the Court, a cost of Rs 20,000 was imposed to be deposited with the Delhi Legal Services Authority within two weeks. With these directions, the petition was disposed of.
GST Case Law Kemexel Ecommerce Pvt. Ltd Versus Sales Tax Officer
Citation-2025 TAXONATION 2840 (DELHI)(Click here to read full case law)
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