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DGGI can initiate proceedings for clandestine supply even if SGST dept. already investigating transaction with one supplier: HC
The petitioner was a registered dealer under the CGST Act, 2017. The DGGI conducted investigation at petitioner’s premises, seized records and issued summons under Section 70. It filed writ petition and contended that the DGGI could not have conducted a parallel proceeding and investigation for same tax period since State GST Authorities were already proceeding against petitioner for investigation of tax period 01-07-2017 to 18-04-2022.
The Honorable High Court noted that there is no ambiguity in language of Section 6(2)(b) of CGST Act, which bars initiation of proceeding by a proper officer under CGST Act where a proper officer under SGST Act has initiated proceeding on a subject matter. However, if subject matter of proceeding is entirely different, there is no bar to maintainability of proceeding. The words “subject matter” can be equated with words “cause of action”.
In the present case, the DGGI was investigating clandestine supply by assessee only whereas investigation by SGST officer was with reference to receipt of materials from one supplier and if subject matter of proceeding was entirely different, there would be no bar to maintainability of proceeding. Therefore, it was not possible to give definite opinion that impugned show cause notice issued by DGGI was barred or not by virtue of operation of Section 6(2)(b) of CGST Act.
Further, a show cause-cum-demand notice had already been issued. Thus, it was held that it would be open for petitioner to take the said plea before the appropriate forum in appropriate proceeding and petition was dismissed.
Matter to be remanded back for reconsideration since assessee's reply and documents were not taken into consideration: HC
The department had initiated proceedings against the petitioner pursuant to an inspection. An intimation was issued and the petitioner replied to same. Thereafter, a show cause notice (SCN) was issued and the petitioner replied to SCN. The order was issued and the petitioner filed writ petition against the same. It was contended that it replied to SCN regarding issues of discrepancy in turnover and reversal of ITC claimed in respect of purchases and also provided documents to support its reply.
The Honorable High Court noted that in the impugned order, the department had recorded the finding that the petitioner had only replied with regard to the tax and not with regard to penalty. However, the reply to SCN was submitted by the petitioner but the authority passed the order without considering the response submitted by the petitioner. Moreover, the order was passed without providing any personal hearing. Therefore, the Court noted that this finding was not correct and the impugned order was liable to be set aside.
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