The Kerala state GST department has announced a big relief for taxpayers who are struggling with show cause notices across multiple districts in the state. Now if multiple GST notices are issued to the taxpayer on the same issue even if it’s for different periods, then the hearings for these multiple GST notices will be held by a single adjudicating authority instead of multiple authorities. Experts say this will help save you the hassle of travelling to each and every district where you have been issued a GST notice and may also reduce the time period to resolve pending cases.
Read below to find out which type of GST notices are eligible for this common adjudicating authority and how it works.
What did the Kerala GST department say about common adjudicating authority?
Kerala GST department said: “Adjudication of show cause notices issued by various verticals has been entrusted with the jurisdictional adjudicating authority in the taxpayer service vertical…instructions have been issued such that if multiple notices are issued to the same taxpayer on the same issue for different periods, the authority adjudicating the notice having the highest value shall adjudicate the other notices.”
Which taxpayers may benefit from a common adjudicating authority
Only if the GST notice relates to the specified section and type then only its hearings will be conducted through a common adjudicating authority. If the below mentioned conditions are not satisfied, then the case proceedings will not be heard through a common adjudicating authority.
According to Dhruv Chopra, Managing Partner, Dewan P.N. Chopra & Co: “The primary condition for a single adjudicating authority to hear the cases is that the notices must be related to a single issue or a series of interconnected issues. Other conditions include:
- If multiple notices are issued to multiple taxpayers on the same issue, such GST show cause notices (SCNs) shall be adjudicated by the Joint Commissioner of Taxpayer Services regardless of the amount involved.
- Where the principal place of business of the notice, having the highest amount of tax or penalty in the GST show cause notice (SCN) falls in a particular district but under the jurisdiction of different authorities, the case related to each taxpayer will be transferred to the Joint Commissioner of Taxpayer services of that district.”
How will the common adjudicating authority deal with multiple GST notices?
According to the circular, here’s how common adjudication for multiple GST notices are to be dealt with:
Common adjudicating authority will work in situations when multiple taxpayers are identified to be involved with respect to a particular issue
Kerala GST department said: “In respect of show cause notices issued by officers of the Intelligence and Enforcement Vertical, there may be cases where the principal places of business of noticees fall under the jurisdiction of multiple adjudicating authorities. There can also be situations where multiple show cause notices are issued on the same issue to different noticees, having the same PAN but different GSTINs and their principal places of business fall under the jurisdiction of multiple adjudicating authorities. When such a situation arises, the present procedure followed is to transfer the case related to each taxpayer involved in the issue to the respective adjudicating authority after issuance of SCN by the proper officer concerned. This results in a scenario where multiple authorities adjudicate on the same issue, potentially leading to legal challenges. To prevent such inconsistencies, a single adjudicating authority shall henceforth handle all adjudications in such situations, ensuring uniformity and consistency in decision-making.”
The district which has the highest amount of demand of tax will be the common authority to hear the other cases
Kerala GST department said: “Where the principal place of business of the noticeee, having the highest amount of demand of tax or penalty in the same show cause notice(s), falls in a particular district, then the notices issued to all other interconnected noticees, whose principal place of business may fall under the jurisdiction of multiple adjudicating authorities, shall be adjudicated by the Joint Commissioner of Taxpayer Services of that specific district.”
Situations where multiple taxpayers are involved in a single issue will also be resolved by a common adjudicating authority
Kerala GST department said: “In situations where multiple taxpayers involved in a single issue are identified to be located in the same district, but under the jurisdiction of different adjudicating authorities, to bring uniformity in adjudication, irrespective of the amount involved, all SCNs shall be adjudicated by the Joint Commissioner of Taxpayer Services vertical of that district. Further, if any connected penalty notices have been issued under any section along with notices issued under sections 73/74/76 of the Kerala SGST Act, then those notices too shall be adjudicated by the common adjudicating authority.”
The joint commissioner of taxpayer services will supervise the common adjudicating authority
Kerala GST department said: “For the purpose of adjudication in such scenarios, the Joint Commissioner of Taxpayer Services are empowered with state-wide jurisdiction vide Notification referred above. When multiple taxpayers across the state are identified to be involved and interconnected in a single detected issue, such show cause notices may be adjudicated, regardless of the amount involved by the Joint Commissioners of Taxpayer Services. The Show Cause Notices issued by any vertical which require a common adjudicating authority shall be made answerable to the Taxpayer Services Joint Commissioners in the following manner regardless of the amount involved.”
What might be the impact of this circular for GST registered taxpayers in Kerala?
ET Wealth Online has asked various experts about the possible impact of this circular. Here’s what they said:
Maulik Manaliwala, Partner, Indirect Tax, BDO India says: This would lead to a consistency in the adjudication process, with a possibility of different adjudicating authorities taking different views is eliminated. The only condition for appointing single adjudicating authority is that the notice must be involving similar issues. However, there may be logistical challenges for some taxpayers if the common adjudicating authority is located in a distant location and virtual hearing facility may not be available or not feasible.
Krishan Arora, Partner, Grant Thornton Bharat: “Circular No. 21/2024-Kerala GST seeks to streamline the adjudication process for show cause notices (SCNs) by introducing a common adjudicating authority for interconnected cases. This approach is expected to ensure consistency and uniformity in decision-making, mitigates the risk of conflicting rulings, and simplifying the overall resolution process for taxpayers. “
Arora said: “The recent introduction of common adjudication process in Kerala is expected to streamline dispute resolution by eliminating redundant investigations on similar issues and reducing legal complexities. With this unified approach, taxpayers in Kerala can anticipate a more efficient legal process, reducing compliance burdens and fostering greater fairness and consistency in outcomes. Ultimately, the reform aims to enhance taxpayer experience by providing quicker resolutions and eliminating administrative hurdles.”
Sudipta Bhattacharjee, Partner (Indirect taxes), Khaitan & Co. says: “This Circular seeks to appoint a single common adjudicating authority within Kerala where multiple taxpayers are facing a common GST issue. This Circular is a laudable initiative since contradictory rulings/conclusions adopted on similar legal issues under GST by different GST officers deviates from the objective of certainty of taxation and adversely affects ease of doing business. This Circular is comparable in spirit with a similar instruction issued by the CBIC earlier this year which was aimed at reducing multiplicity of proceedings and consistency of position on common GST issues. One hopes that this Circular will be implemented in its letter and spirit and similar steps would be taken by other states too.”
Chartered Accountant Ketan Gadhiya – Chairman, Indirect Tax Committee, Chartered Accountants Association Surat (CAAS): State of Kerela has always been at the forefront of disciplined thinking and demeanour. The recent Circular for common adjudication authority is a welcome step to avoid multiplicity of proceedings before various adjudicating authorities. This may avoids repetition of work and ensure uniform adjudication especially when question of law is involved. At present taxpayers feel harrassed by a plethora of attacks by various adjudicating authorities on same issue for same period, but the taxpayer has to still abide to the proceedings, which is a pitiful and time consuming situation.
Reduction in legal complexities.
Gadhiya said: “Unfortunately, field formations in Gujarat SGST are busy with promoting collection of alms, which give them lesser time to ponder upon the much required demarcation as what to do when multiple adjudicating authorities handle same issue for same period of the same tax payer. Needless to emphasize, such demarcation is most needed especially when the taxpayer is paraded before Enforcement, Investigation, Local Office of State, Local of Centre, Preventive Wing, DGGI, Audit and such other fancy named wings. It is also seen that in matters involving question of law, several authorities create liability where others on same issue had given clean chit to the tax payer.”
Chopra from Dewan P.N. Chopra & Co. says: “The impact of this circular on GST-registered taxpayers is multifaceted. On the positive side, it can reduce compliance burdens by simplifying the adjudication process, expedite dispute resolution through centralized adjudication, and enhance fairness and transparency in decision-making. However, there are potential drawbacks, such as an increased workload for adjudicating authorities, which could lead to delays, and the risk of inconsistent decisions if not implemented effectively.”
