Sharadapura Krishna Chandra Vs Superindent of Central Tax (Karnataka High Court)
The Karnataka High Court allowed the writ petition challenging parallel GST proceedings initiated by State authorities when proceedings on the same subject matter had already been initiated by Central GST authorities.
The petitioner sought quashing of multiple orders, including an Order-in-Original dated 30.04.2024 passed under Section 74 of the Act, its summary in Form GST DRC-07 dated 05.05.2024, an adjudication order dated 08.02.2024 passed under Section 73(9), and its corresponding summary order.
From the record, the Court noted that the Central GST Department had first initiated proceedings against the petitioner through a show-cause notice dated 19.10.2020. Subsequently, the State GST authorities issued summons on 23.08.2023 and initiated proceedings on 07.09.2023, followed by a show-cause notice dated 19.12.2023. Additional notices and intimations were issued in December 2023 and January 2024, culminating in an adjudication order dated 08.02.2024 by the State authorities. Thereafter, a further Order-in-Original dated 30.04.2024 was passed.
The petitioner contended that once Central GST authorities had initiated proceedings on the same subject matter, the State GST authorities were barred from initiating parallel proceedings in view of Section 6(2)(b) of the CGST/KGST Act, 2017. Reliance was placed on earlier decisions of the Karnataka High Court, including Toyota Kirloskar Motor Pvt. Ltd., Huida Sanitaryware India Pvt. Ltd., and Toyota Logistics Kishor India Pvt. Ltd.
The Court examined Section 6 of the CGST/KGST Act, which deals with authorization of officers and the bar on dual proceedings. Section 6(2)(b) provides that where a proper officer under the State GST Act has initiated proceedings on a subject matter, no proceedings shall be initiated by a proper officer under the CGST Act on the same subject matter, and vice versa in practical application as interpreted by the Court.
Referring to its earlier rulings, the Court reiterated that once proceedings are initiated by one authority—either Central or State—on a particular subject matter, the other authority cannot initiate parallel proceedings on the same issue. Such dual proceedings were held to be without jurisdiction and contrary to the statutory bar under Section 6(2)(b).
Applying these principles to the present case, the Court found that the Central GST authorities had already initiated proceedings against the petitioner. Despite this, the State GST authorities proceeded to issue notices and pass adjudication orders on the same subject matter. The Court held that these subsequent proceedings by the State authorities were not maintainable and were clearly barred by Section 6(2)(b).
In light of this finding and consistent with the earlier judgments cited, the Court concluded that the impugned actions of the State authorities were without authority of law. Accordingly, the writ petition was allowed.
The Court quashed the Order-in-Original dated 30.04.2024 and its summary dated 05.05.2024 passed by one respondent, as well as the adjudication order dated 08.02.2024 and its summary passed by the other respondent.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
