Toyota Kirloskar Auto Parts Pvt. Ltd. Vs Union of India (Karnataka High Court)
In a significant ruling for taxpayers, the Karnataka High Court has quashed a show cause notice issued by the State Goods and Services Tax (GST) authorities to Toyota Kirloskar Auto Parts Pvt. Ltd. The court found that the state’s action duplicated proceedings already initiated by Central GST authorities on the same matter, a practice barred under the GST Act. This decision reinforces the principle against parallel investigations by central and state tax departments for the same issue.
The case, Toyota Kirloskar Auto Parts Pvt. Ltd. Vs Union of India, involved a petition filed by Toyota Kirloskar Auto Parts challenging two show cause notices. One notice, dated September 26, 2023, was issued by State revenue authorities (Respondent No. 4), demanding input tax credit (ITC) with interest under Section 50(1) and 50(3) of the CGST/KGST Act, 2017. The second notice, dated September 27, 2023, was issued by Central revenue authorities (Respondent No. 3), raising demands for IGST and ITC, along with interest and penalty. The core dispute revolved around the petitioner’s availment of ITC amounting to Rs. 9,62,12,431/- on integrated tax paid under the reverse charge mechanism for manpower supply services received between July 2017 and October 2022.
