Follow Us :

Case Law Details

Case Name : Rajesh Mittal Vs Union of India (Gauhati High Court)
Appeal Number : WP(C)/371/2024
Date of Judgement/Order : 25/01/2024
Related Assessment Year :

Rajesh Mittal Vs Union of India (Gauhati High Court)

The Hon’ble Gauhati High Court in the case of Rajesh Mittal vs Union of India [WP(C) No. 371 of 2024 dated January 25, 2024] relying upon the provision of sub-clause (b) of sub-section (2) of Section 6 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) stayed the proceeding initiated by the Revenue Department, thereby holding that, Central GST Authority should not have issued the SCN when State GST Authorities have already issued SCN on the same issue. The case delves into the jurisdictional conflict arising when both Central GST Authority and State GST Authority issue show cause notices (SCNs) on the same subject matter. Let’s delve deeper into the details and analysis of this significant judgment.

Facts:

The Revenue Department (“the Respondent”) served a Show Cause Notice dated December 01, 2023 issued by the State GST Authorities and December 27, 2023 issued by Central GST Authority,(“the SCN”) to Rajesh Mittal (“the Petitioner”), stating that the Petitioner had wrongly availed the input tax credit (“ITC”) thereby violating the provisions of Section 16 (4) of the CGST Act for which reply was filed by the Petitioner.

Held:

The Hon’ble Gauhati High Court in the case of WP(C) No. 371 of 2024 dated January 25, 2024 relying upon the provision of sub-clause (b) of sub-section (2) of Section 6 of the CGST Act, stayed the proceedings initiated by the Respondent on the ground that, Central GST Authority should not have issued the SCN when State GST Authorities have already issued SCN on the same issue.

Relevant Provisions:

Section 6 (2)(b) of CGST Act

“Section 6(2)(b): Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances

(2) Subject to the conditions specified in the notification issued under sub-section (1),

(b) Where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.”

Conclusion: The judgment in Rajesh Mittal vs Union of India sheds light on the intricacies of GST proceedings and the significance of statutory provisions in resolving jurisdictional conflicts. It reaffirms the principle that where State GST Authorities have initiated proceedings on a subject matter, the Central GST Authority should refrain from initiating parallel proceedings. This decision serves as a guiding principle for maintaining the integrity and coherence of GST enforcement mechanisms.

FULL TEXT OF THE JUDGMENT/ORDER OF GAUHATI HIGH COURT

Heard Mr. R.S. Mishra, learned counsel for the petitioner; Ms. K. Phukan, learned Central Government Counsel for the respondent no. 1; Mr. S.C. Keyal, learned Standing Counsel, CGST for the respondent nos. 2, 3 & 4; and Mr. B. Gogoi, learned Standing Counsel, Finance and Taxation Department [SGST] for the respondent nos. 5 & 6.

2. The petitioner is a registered assessee under the Central Goods and Services Tax Act, 2017/State Goods and Services Tax Act, 2017 with GST registration no. 18ADFPMO514R1Z9. Alleging violation of the provisions contained in Section 16[4] of the CGST Act, 2017, the petitioner was served a notice in Form GST DRC 01A dated 29.11.2023, stating that the petitioner had wrongly availed Input Tax Credit [ITC] for the period from June, 2018 – March, 2019 amounting to Rs. 1,46,41,235/-. By the said notice in Form GST DRC 01A, the respondent no. 4 advised the petitioner to pay the said amount of Rs. 1,46,41,235/-. The said Notice was followed by a Show Cause Notice dated 01.12.2023 from the respondent no. 6 alleging similar kind of violation, that is, violation of the provisions of Section 16[4] of the CGST Act, 2017/SGST Act, 2017 and the petitioner was asked to show cause as regards wrongly availed Input Tax Credit to the extent of Rs. 1,46,41,235/-. On receipt of the Show Cause Notice dated 01.12.2023, the petitioner submitted his reply to the Show Cause Notice on 30.12.2023 [uploaded on 31.12.2023]. When the proceedings initiated by the SGST authorities by the Show Cause Notice dated 01.12.2023 is pending, the petitioner has been served another Show Cause Notice dated 27.12.2023 issued under the hand of the respondent no. 4 for violation of the provisions of inter alia Section 16[4] of the CGST Act, 2017 and it has been alleged that the petitioner had availed and utilized an amount of Rs. 1,46,41,235/- as Input Tax Credit wrongly.

3. Mishra, learned counsel for the petitioner has contended that once the proceedings has been initiated by the SGST authorities by the Show Cause Notice dated 01.12.2023, the CGST authorities could not have issued a Show Cause Notice on 27.12.2023 on the same subject-matter. Such an action is in violation of the statutory prescription contained in sub-clause [b] of sub-section [2] of Section 6 of the CGST Act, 2017/SGST Act, 2017.

4. Keyal, learned Standing Counsel, CGST has sought for some time to obtain instructions in the matter as the petitioner, against the Show Cause Notice dated 27.12.2023, has filed a representation before the CGST authorities on 08.01.2024. He has submitted that he will obtain instructions as to whether any decision has been taken by the CGST authorities on the said representation dated 08.01.2024. Mr. Keyal has, thus, sought for listing of the case on 07.02.2024.

5. List the case on 07.02.2024.

6. Having regard to the materials on record, the two Show Cause Notices and the provisions contained in sub-clause [b] of sub-section [2] of Section 6 of the CGST Act, 2017/SGST Act, 2017, the respondent CGST authorities shall not proceed further in terms of the Show Cause Notice dated 27.12.2023 till the next date of listing.

****

(Author can be reached at info@a2ztaxcorp.com)

Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
April 2024
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
2930