Case: Subhash Agarwalla Vs State of Assam and 4 Ors (Guwahati High Court) (WP(C)/683/2024)
Fact
- The authority under the SGST Act issued a Demand–cum–Show Cause Notice under S. 73 of the SGST Act on 23.11.2022 asking the taxpayer to show cause as to why the amount indicated therein shall not be demanded and recovered from the taxpayer for the FY 2017-2018.
- An authority under the CGST Act had thereafter, issued a Demand–cum–Show Cause Notice on 27.04.2023 also under S. 73 of the CGST Act asking the taxpayer as to why the amount indicated therein shall not be demanded and recovered from the taxpayer for the FY 2017-2018, 2018-2019 & 2019-2020.
- Both the notices had alleged that during the said period, the taxpayer availed and utilized Input Tax Credit [ITC] for the amounts, indicated therein, which were inadmissible in terms of Section 16[4] of the CGST Act/SGST Act
- Pursuant to the Show Cause Notice dated 27.04.2023, the authority under the CGST Act has passed an Order-in-Original on 14.11.2023. Subsequently, the authority under the SGST Act has passed an Order-in-Original on 11.12.2023.
- The taxpayer contended that two parallel proceedings in respect of the same period, that is, 2017-2018 is not permissible under the provisions of Section 6 of the CGST Act, 2017 and SGST Act, 2017
Held
- Having regard to the provisions contained in S. 6 of the CGST/SGST Act, more particularly, S. 6 (2) which inter alia indicates that once a proceeding is initiated either of the above two Acts, another proceeding for the same period under the other Act is not to be initiated.
Our Comments
Recently, the CBIC has come up with the instructions to its field officers to create an internal process to eliminate repeated notices to companies and individuals that are already under investigation by state goods and services tax authorities. One of the releases read that approximately 10,000 nos. of cases are such wherein parallel proceedings have been initiated by the department, a taxpayer has received notices both from the central and state GST Bodies. A high-level official commented, “Cases where both central and state agencies have issued notices or initiated investigations on the same matter have been identified. We are drafting a comprehensive directive to address this.”