2026-VIL-845-MAD
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SGST High Court Cases

IGST/Customs - Subsequent demand for differential duty and penalty after payment of differential duty pursuant to audit objections - Appellant imported motor vehicle parts and claimed benefit of lower IGST rate of 18% under Serial No.452L of Schedule III to Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017 - Department contended goods were classifiable under Serial No.170 attracting IGST at 28% - Whether proceedings under Section 28(4) of Customs Act could be initiated after appellant had already paid entire differential duty with interest pursuant to audit objections and whether proceedings were barred by limitation – HELD - Section 28(1) of the Customs Act, 1962 applies where duty has not been levied, short-levied or short-paid for reasons other than collusion, wilful misstatement or suppression of facts. Section 28(4) applies only where short levy or short payment is by reason of such conduct - In present case relevant date is when audit objections were treated as closed after appellant paid entire differential duty with interest. Even assuming Section 28(1) applies, SCN ought to have been issued within prescribed period but was issued more than three years later making proceedings clearly barred by limitation under Section 28(1) - Section 28(2) further provides that where person pays duty with applicable interest under Section 28(1) and informs proper officer of such payment, no show cause notice shall thereafter be issued in respect of duty, interest or any penalty relating thereto. Show cause notice does not contain specific allegation of wilful misstatement, collusion or suppression of material facts but merely states appellant wrongly availed benefit of lower IGST rate - Absence of essential ingredients required under Section 28(4) means extended period cannot be invoked. Plea of suppression raised for first time in counter affidavit cannot supplement contents of show cause notice - Existence of alternative remedy of appeal under Section 128 is not absolute bar to writ jurisdiction where impugned proceedings are without jurisdiction or barred by limitation - Impugned order is set aside and writ petition is allowed
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