SAIDALAVI Vs. STATE TAX OFFICER

JUDGEMENT

(1.) These writ petitions have been filed by various entities which are admittedly associated with each other in business and essentially belonging to the same group of individuals. While W.P (C) Nos.18127/2020 and 18081/2020 are filed by Private Limited Companies. W.P (C) Nos.18692/2020, 18695/2020 and 18122/2020 are filed by partnership firms and W.P (C) No.18078/2020 filed by one K.T. Saidalavi, Managing Director/Managing Partner of the aforesaid entities.

(2.) The issue that arises for consideration is short. In all these cases the proper officer under the Central Goods and Services Tax Act (hereinafter referred to as 'the CGST Act') had initiated enquiry regarding non-payment of GST and had directed the production of certain records. This was followed by summons issued under Sec. 70 of the CGST Act leading to the recording of certain statements. Certain records were also produced before the Central Authority. While matters stood thus the State Authority initiated proceedings under Sec. 74 read with Sec. 122(1) of the CGST/SGST Acts. According to the petitioners in these cases the initiation of proceedings under Sec. 74 by the State Authority that culminated in order under that provision cannot be sustained in law in the light of the provisions contained in Sec. 6 of the CGST/SGST Acts. It is the case of the petitioners that a reading of the provisions contained in Sec. 6 of the CGST/SGST Acts will indicate that where proceedings have been initiated by one authority, such proceedings shall be continued and culminated by that authority. In other words, it is submitted that in the facts of these cases, since proceedings have already been initiated by the Central Authority in the year 2018 and summons had been issued by that authority and statements have been recorded by that authority, the State Authority could not have issued any show cause notice under Sec. 74 of the CGST/SGST Acts and if at all such notices could have been issued by the Central Authority only.

(3.) The learned counsel appearing for the petitioners would vehemently contend that a reading of Sec. 6 of the CGST/SGST Acts will indicate that while there is no prohibition in Central Authority initiating proceedings in respect of an assessee under State jurisdiction, the proceedings so initiated will have to culminate any order passed by that authority and there cannot be any transfer of proceedings from one authority to another authority after the proceedings have been so initiated. The learned counsel for the petitioner placed considerable reliance on the judgment of the Patna High Court in Baibhaw Construction (P) Ltd. v. Union of India; [2023] 156 taxmann.com 378 (Patna), the judgment of the Gujarat High Court in Vipulchandra Purusottamdas Mahant Prop of Vaibhavi Construction v. Commissioner of State Tax; 2023 SCC OnLine Guj 4923, the judgment of the Jharkhand High Court in Vivek Narsaria v. State of Jharkand; 2024 SCC OnLine Jhar 50 and also another judgment of the Gujarat High Court in Sureshbhai Gadhecha v. State of Gujarat; [2020] 114 taxmann.com 478 (Gujarat). It is submitted that in the facts of the present case the subject matter of the proceedings initiated by the Central Authority and the State Authority are one and the same. It is submitted that on the strength of the judgment in RCI Industries and Technologies Ltd., v. Commissioner, DGST Delhi; 2021 SCC OnLine Del 3450 that where intelligence based enforcement action is taken against an assessee administratively assigned to the State Tax Authority, by a Central Authority then there will be no transfer of the proceedings to the State Authority as has been done in these cases. The learned counsel also placed reliance on a Circular No.D.O.F No.CBEC/20/43/01/2017 GST (Pt) dated 05- 10-2018 in support of this contention. Lastly, it is submitted that there was no occasion to issue any proceedings under Sec. 74 of the CGST/SGST Acts and since proceedings were only on account of non-filing of returns, the proceedings should have been initiated under Sec. 62 of the CGST/SGST Acts.