No Part Adjudication of SCN Issued Under CGST Act; Directs Assessee to Appear Before Authority for Order

Case Details: Deputy Commissioner (Intelligence) v. Minimol Sabu- [2025] 171 taxmann.com 216 (Kerala)

Judiciary and Counsel Details

• Dr. A.K. Jayasankaran Nambiar & Easwaran S., JJ.
• Smt. Resmitha Ramachandran, Government Pleader for the Appellant.
• Akhil Suresh, Adv. for the Respondent.

Facts of the Case

The assessee, engaged in the sale of gold, silver, and diamond ornaments, was subjected to a search by tax authorities, during which data was retrieved from the “Gold Mine” billing software. Based on this data, an SCN under Section 74 of the CGST Act was issued, alleging suppression of outward supplies. The assessee challenged the SCN, arguing that it lacked cause of action and was erroneously issued against a separate entity with a different GST registration. It contended that this jurisdictional issue should be adjudicated first before proceeding with the substantive tax determination.

Accepting this argument, a Single Judge directed the proper officer to rule on this preliminary issue before addressing the merits of the SCN. Aggrieved by this order, the revenue filed the present appeal, asserting that the CGST Act does not allow adjudication in stages and that all issues must be determined in a single proceeding.

High Court Held

The Honourable High Court noted that the CGST Act does not permit adjudication in stages and held that all issues must be determined in a single, comprehensive proceeding. It emphasized that staged adjudication could lead to procedural inefficiencies and an unnecessary accrual of interest on any tax liability ultimately found due. The Court further held that writ jurisdiction under Article 226 cannot be invoked merely to challenge an SCN unless there is a patent lack of jurisdiction, which was not applicable in this case. Accordingly, the Court set aside the Single Judge’s order and directed the assessee to participate in the adjudication process.

List of Cases Reviewed

• Judgment Dated 22.11.2024 IN WP(C) NO.40226 OF 2024 of High Court of Kerala (Para 4) reversed.

List of Cases Referred to

• 10. In D.P.Maheswari v. Delhi Administration & Ors [(1983) 4 SCC 293 (para 10).