Stalwart Alloys India Private Limited Vs Union of India and others (Punjab And Haryana High Court)
Conclusion: Merely on information that suspicious suppliers were not located in the same state would not be ground to transfer proceedings from the State Authorities to Centre relating to fraudulent availment of ITC were related to a particular firm which was registered in State of Haryana..
Held: An enquiry was initiated by Haryana State Tax Department with regard to wrongful availment of Input Tax Credit against assessee-company and also by multiple DGGI Zonal Units. Aggrieved by multiple enquires, assessee preferred CWP in which respondents were directed to take a decision in this regard for conducting proceedings by one agency alone for the period of 01.07.2017 to 31.12.2018. In pursuance thereto, the State Government GST Department decided to take up the enquiry proceedings against assessee and the record including ledger account, sales and purchase invoices and proof of payment etc. were requisitioned upto 31.01.2021. With reference to the earlier period from 01.07.2017 to 31.12.2018 also the record was seized in the search conducted by the State GST authorities. A notice under Section 74 (1) of the Haryana Goods and Services Tax Act, 2017 was also issued for the tax period from 01.07.2017 to 21.07.2019 to the petitioner. The issue of fraudulent availment of ITC is pending with the State authorities. Thereafter, acting on intelligence gathered from Senior Intelligence Officer, search was again conducted at the registered premises of assessee-company on 19.02.2021 and the factory premises was also searched whereupon the officers were informed that records of assessee- company were with the Excise and Taxation Officer, Ward-1, Kurukshetra for the period from July, 2019 to January, 2021. Assessee also preferred CWP assailing the vires of Section 69 and 132 of the CGST Act, 2017. The Principal Director (Intelligence), DGGI, Headquarters has vide letter dated 15.03.2022 accorded permission to the office of the DGGI, Meerut Zonal Unit to conduct the centralized investigation against assessee-company for the period after 2019. Assessee stated that another search and seizure proceedings were again conducted at the premises of assessee-company by the DGGI, Meerut Zonal Unit. The State Tax Officer had transferred the proceedings pertaining to assessee-company to the DGGI, Meerut Zonal Unit. Feeling aggrieved of the transfer of all proceedings to DGGI, Meerut Zonal Unit, by the State Tax Officer , assessee had preferred this writ petition, inter-alia , stating that the action was in violation of provisions of Section 6 (2)(B) of the HGST Act and the proper officer in terms of Section 6(2)(b) of the HGST Act was the officer who had initiated the proceedings under Section 74(2) of the Act where after he does have the power to transfer the proceedings to DGGI. It was submitted that the multiple proceedings could not be allowed to continue and the proper officer would be the State Tax Officer alone who had the jurisdiction to examine the subject matter. Revenue contended that so far as the period after 2019 was concerned, the State Government had not taken any steps for conducting investigation. It was only for overlapping periods that the Court had passed an order and thereafter the said proceedings were now being conducted by the proper officer under the Haryana GST Act. Since the suspicious suppliers were not falling in the State of Haryana, it would be in the interest of justice that the enquiry was conducted by the DGGI, Meerut Zonal Unit. it was decided that the State GST authority would be examining the action of the previous year and for the subsequent period the action was to be taken by the Central GST authorities, if they have received any information. It was held that entire proceedings under the GST Act for investigation relating to fraudulent availment of ITC were related to a particular firm which was registered in State of Haryana. The State Tax Authority could not have been asked to transfer the case already pending before it relating to the availment of wrongful ITC under Section 74 (1) against assessee firm. Any new information which the respondents might have gathered relating to fraudulent availment or passing on, could always be informed to the authority who was already conducting the investigation and inquiry and proceedings under Section 74 (1) of the Act. Since the proceedings have already been initiated by the State authorities there was no occasion to uphold the action of the DGGI or the action of the State Tax Officer in transferring the proceedings pertaining to assessee-firm which were pending.
