Enquiries by Central Authority under GST cannot be restricted due to pendency of proceedings before the State Authority
In Kuppan Gounder P.G. Natarajan v. Directorate General of GST Intelligence and others [TS-400-HC(MAD)-2021-GST decided on July 29, 2021], Kuppan Gounder P.G. Natarajan (Petitioner) filed a writ petition challenging the summons issued by the Directorate General of GST Intelligence (Respondents) u/s 70 of the Central Goods and Services Tax Act, 2017 (CGST Act) on the ground that summons by the Revenue were issued while proceedings from a notice on intimation of discrepancies in the return were already initiated by the State Authorities, thereby going against Section 6(2)(b) of the CGST Act.
The Hon’ble High Court of Madras noted that it needs to be established that subject matter is one and the same and that mere pendency of proceedings before the State authorities is not a ground to restrain the Central authorities from issuing summons and conduct investigation regarding certain allegations.
Further observed that a detailed adjudication cannot be conducted by the High Court in a writ proceeding to analyse the business intricacies, tax paid etc., as it would lead to errors and omissions. The same should be scrutinised by the Department itself.
Granting the Petitioner, the liberty to defend his case by responding to the summons and producing all relevant documents, evidences, statements, etc., and the respondents to investigate the matter in accordance with the procedure, the court thereby dismissed the writ petition.
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