Multiple GST SCNs for same year permissible : Madras HC

The Madras High Court in the case of Radiant Cash Management Services Ltd. vs. The Commercial Tax Officer (WP No. 49092 of 2025) decided on 18 December 2025 delivered an important ruling holding that multiple GST SCNs for same year were valid under the GST law. The case pertaining to F.Y. 2021-22 reportedly opened the door for the GST Department to claim validity on multiple show cause notices being issued for the same tax period so long as the issues dealt by the notices do no overlap.

Background of the Case

The petitioner, Radiant Cash Management Services Ltd., challenged a Show Cause Notice (SCN) in Form GST DRC-01 dated 23 September 2025 issued under Section 73 for FY 2021-22. The notice proposed demands related to:

• Unreconciled turnover reported in GSTR-9C
• Exempted/Nil-rated/Non-GST supplies
• Credit notes

The total proposed demand was approximately ₹2.14 crore (including tax, interest, and penalty).

The petitioner argued that this SCN was invalid because:

• An earlier intimation in Form GST DRC-01A (dated 06 May 2025) and a subsequent SCN (dated 29 May 2025) had already been issued for the same tax period.
• The earlier SCN was quashed by the Madras High Court in a prior writ petition (WP No. 23660 of 2025, order dated 31 July 2025), with directions to consider the reply to DRC-01A and provide a personal hearing.
• Issuing another SCN for the same year violated the principles of natural justice and amounted to multiple assessment proceedings for the same tax period, which the petitioner claimed was impermissible under law.

The petitioner relied on precedents like Dancans Industries Ltd. (Supreme Court) and certain Calcutta High Court rulings to argue against parallel proceedings.

Findings by the Court

The court compared the earlier (quashed) proceedings with the impugned SCN and observed:

• Only one item (exempt supplies of ₹19,001) overlapped between the two sets of proceedings.
• The earlier proceedings primarily covered ITC reversals, ineligible ITC under Section 17(5), excess ITC vs. GSTR-2A, and late fees.
• The impugned SCN addressed completely different issues (unreconciled turnover, exempt supplies reconciliation, and credit notes).

Multiple GST SCNs for same year permissible : Reasons

The court dismissed the writ petition and upheld the validity of the impugned SCN. Key holdings include:

1. No statutory bar on multiple SCNs for the same tax period
   • The GST law (Section 73 and Rule 142) does not expressly prohibit multiple proceedings for the same tax/financial year if the notices address distinct and separate discrepancies.
   • GST enactments form a self-contained code; principles like res judicata, estoppel, or provisions of the Code of Civil Procedure (Sections 10–12, Order II Rule 2) do not strictly apply.
2. Overlap limited to one minor item
   • Any duplication (here, only the exempt supply item) can be addressed and dropped during adjudication on merits. The proceedings were otherwise on entirely different subject matters.
3. Precedents distinguished
   • Cases like Dancans Industries Ltd. (2006), Simplex Infrastructures, and Avery India involved overlapping demands on the same subject matter or jurisdictional conflicts — not applicable here.
   • A Rajasthan High Court interim stay order cited by the petitioner had no binding precedent value.
   • The court followed the Allahabad High Court’s view (ALM Industries Ltd., 2025) allowing multiple SCNs when dealing with different issues.
4. Scrutiny under Section 61 ≠ final adjudication
   • Intimations like ASMT-10 or DRC-01A are part of the scrutiny process; unsatisfactory replies can lead to SCN under Section 73. Explaining discrepancies in ASMT-10 does not bar a subsequent SCN.
5. Liberty granted
   • The petitioner was given 30 days from receipt of the order to file a reply to the impugned DRC-01 dated 23 September 2025.
   • The department was directed to adjudicate on merits thereafter (including dropping any duplicative demand).

Practical Implications for Taxpayers and Practitioners

• Multiple SCNs allowed if issues are distinct — Taxpayers cannot challenge a fresh SCN merely because another SCN (even if quashed) existed for the same year.
• Adjudication stage is key for overlaps — Any duplication should be raised and resolved during reply/hearing, not at the writ stage.
• Contrast with multi-year clubbing — This ruling is specific to multiple SCNs within the same tax period/year. Recent Madras High Court decisions (and others) have separately held that clubbing multiple financial years into one SCN is generally impermissible.
• GST as a complete code — Courts continue to emphasize that civil procedure principles do not automatically transplant into GST proceedings unless explicitly provided.

This judgment provides clarity and flexibility to tax authorities in handling separate discrepancies discovered at different points, while protecting taxpayers from genuine duplication through proper adjudication.

Taxpayers facing similar situations should carefully compare the issues raised in each notice and raise specific objections during the reply/personal hearing stage rather than rushing to writ courts unless there is clear jurisdictional error or violation of natural justice.