Parallel proceedings by Central & State Tax Authorities cannot be initiated at the same time
Bhaskar Thakkar
Passionate Golfer & Founder BT Associates (Indirect Tax - Consulting firm) & GSTidea.com (Knowledge Sharing Portal on GST)
The Orissa High Court hold that if Central Tax authority initiates actions against a taxpayer, then they cannot transfer the case to its state counterpart and no parallel action can be taken by the State tax Authorities during the pendency of such proceeding.
Facts of the case:-
The present petition was filed by the petitioner which is engaged in trading of iron and scraps. It was argued by the Petitioner that their business premises was impounded by the Director General of Goods and Services Tax Intelligence (DGGSTI), Bhubaneswar Zonal Unit and a search was undertaken thereof under Section 67 of the Central Goods and Services Tax Act, 2017 (CGST Act).
Section 67of CGST Act deals with the power of the officer to conduct inspection, search and seizure in the premises of the taxable person.
During the course of search records, documents were seized and summons were issued to the petitioner under Section 70 of the CGST Act on 31st October, 2018.The Petitioner participated in the proceeding which is still pending.
Section 70 of CGST Act deals with the power to summon persons to give evidence and produce documents.
The petitioner further received a show cause notice by the State Authority, wherein the allegation was that tax dues has not been paid or short paid or refund has been released erroneously or input tax credit has been wrongly availed or utilized as provided under Section 74 of the Odisha Goods and Services Tax Act (OGST Act).
Section 74 of OGST Act deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful misstatement or suppression of facts.