Agrawal Soya Extracts (P.) Ltd. Vs Union of India (Madhya Pradesh High Court)
The Madhya Pradesh High Court, in the case of Agrawal Soya Extracts (P.) Ltd. vs. Union of India, addressed the issue of parallel proceedings under the Central Goods & Service Tax Act, 2017 (CGST Act). The petitioner, Agrawal Soya Extracts (P.) Ltd., a company engaged in the business of soybean products, challenged multiple summons issued by the Additional Assistant Director of the Directorate General of GST Intelligence (DGGI), Bhopal Zonal Unit.
The Petitioner’s Contention
The petitioner argued that the DGGI’s summons, issued under Section 70 of the CGST Act for an enquiry, violated Section 6(2)(b) of the CGST Act. This section, according to the petitioner, bars multiple proceedings on the same subject matter. The key claim was that the Office of Commissioner, CGST & Central Excise, Ujjain Commissionerate, had already issued a show-cause notice (SCN) to the company under Section 74(1) of the CGST Act on the very same issue of disputed Input Tax Credit (ITC) involving similar allegations. The initial ITC amount under investigation was approximately Rs. 3.93 crore, which was later reduced.
The Respondent’s Stance
The respondents (the DGGI) contended that the writ petition was not maintainable, arguing that the petitioner could raise all objections after a notice or summon under Section 74 was issued. Crucially, they submitted that the bar under Section 6 of the CGST Act does not apply at the investigation/enquiry stage, but only to the formal initiation of proceedings. They relied on the recent Supreme Court judgment in Armour Security (India) Limited v/s Commissioner CGST, Delhi East Commissionerate.
