Huida Sanitaryware India (P) Limited Vs Deputy Commissioner of Central Tax (AE) (Karnataka High Court)
In a significant ruling, the Karnataka High Court has quashed a show cause notice issued by the Deputy Commissioner of Central Tax against Huida Sanitaryware India (P) Limited. The decision underscores the legal principle that dual proceedings under the Goods and Services Tax (GST) framework cannot be pursued for the same matter.
The petitioner, Huida Sanitaryware, sought to annul the show cause notice dated September 15, 2022, asserting that the proceedings initiated by the Central GST (CGST) authorities were invalid. The company argued that the notice violated provisions outlined in the GST Act, specifically Section 6(2)(b), which prohibits initiating parallel proceedings on the same subject matter once a case has been started under the State Goods and Services Tax (SGST) Act.
The case stemmed from earlier actions taken by Karnataka State GST authorities, who, on August 11, 2020, initiated proceedings against the petitioner. This culminated in an adjudication order dated November 9, 2022, under Section 73(1) of the Karnataka GST Act. Following these actions, CGST authorities launched their own penalty proceedings concerning the same transactions between Huida Sanitaryware and M/s Crystal Hardware.
The crux of the petitioner’s argument rested on the assertion that the CGST authorities’ actions were barred because they had followed proceedings initiated by the state GST authorities regarding the same issue. The petitioner contended that both sets of proceedings were intertwined and that pursuing both violated the GST framework’s stipulations, specifically Section 6(2)(b) and Section 74 of the CGST Act.
