Adjournment granted for Show Cause Notice proceedings cannot be clubbed together with adjournment granted for other proceedings under GST

The Hon'ble Calcutta High Court in the case of Pioneer Co-Operative Car Parking Servicing and Constructions Society Ltd. v. Senior Joint Commissioner [WPA No. 3092 of 2024 dated March 1, 2024] disposed of the writ petition thereby, holding that, adjournment granted for Show Cause Notice proceedings under Section 73 of the Central Goods and Services Tax Act, 2017 ("the CGST Act") cannot be clubbed together with adjournment granted for other proceedings under GST.

Facts

Pioneer Co-Operative Car Parking Servicing and Constructions Society Ltd. ("the Petitioner") is a cooperative society registered under the West Bengal Cooperative Societies Act, 1973, and is engaged in the business of rendering service of collecting parking fees. The Petitioner was issued a Show Cause Notice dated September 12, 2023 ("the SCN") by the Revenue Department ("the Respondent") under Section 73(1) of the CGST Act, for which reply was filed by the Petitioner. Thereafter, Final Order dated November 6, 2023 ("the Impugned Order") was issued, thereby determining the tax liability under Section 73(9) of the CGST Act. 
Aggrieved by the Impugned Order, the Petitioner filed a writ petition contending that, no reasonable opportunity of hearing was granted to the Petitioner. 

Issue

Whether adjournment granted for Show Cause Notice proceedings under Section 73 of the CGST Act can be clubbed together with adjournment granted for other proceedings under GST?

Held

The Hon'ble Calcutta High Court in the case of WPA No. 3092 of 2024 held as under:

• Noted that, as per sub-section (5) of Section 75 of the CGST Act, upon sufficient cause shown by the person, the adjournment should be granted by the proper officer and the reasons are to be recorded in writing. However, the adjournment should not be granted more than three times to a person during the proceeding. 
• Opined that, the adjournment granted to the Petitioner in relation to the proceedings under Section 61 of the CGST Act cannot be clubbed together with the SCN proceedings and holding that, the Petitioner was granted ample opportunity to respond to SCN issued under Section 73(1) of the CGST Act. 
• Held that, the communication dated February 15, 2024, for recovery of tax is not sustainable and is liable to be quashed. 
• Directed that, the Petitioner shall file a response to the SCN issued and the Respondent shall communicate the date of personal hearing accordingly. 

Relevant Provision

Section 75(5) of the CGST Act

"Section 75: General provisions relating to determination of tax.

(5) The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:

Provided that no such adjournment shall be granted for more than three times to a person during the proceedings."