Introduction: In a landmark decision, the Hon’ble Guwahati High Court addressed the issue of whether two parallel proceedings for the same period under the Central Goods and Services Tax Act, 2017 (CGST Act) and State Goods and Services Tax Act, 2017 (SGST Act) are permissible. The Hon’ble Guwahati High Court in the case of Subhash Agarwalla v. State of Assam [Case No. WP(C)/ 683/2024 dated February 12, 2024], held that once a proceeding is initiated under either in Central Goods and Services Tax Act, 2017 (“the CGST Act”) or State Goods and Services Tax Act, 2017 (“the SGST Act”), another proceeding for same period under other Act cannot to be initiated. Therefore, the operation of the Order-in-Original was to remain suspended till the returnable date. This article delves into the case of Subhash Agarwalla v. State of Assam, shedding light on the facts, the court’s findings, and the implications for the broader landscape of GST law.
Facts:
Subhash Agarwalla (“the Petitioner”) was issued the Demand-cum-Show Cause Notice dated November 23, 2022 (“the Impugned SCN”) by the SGST Authority under Section 73 of the SGST Act, asking the Petitioner why the amount indicated therein shall not be demanded and recovered from the Petitioner for the Financial Year 2017-2018. Subsequently, another the Demand-cum-Show Cause Notice dated April 27, 2023 (“the Impugned SCN”) was issued by the CGST Authority asking Petitioner why the amount indicated therein shall not be demanded and recovered from the Petitioner for the Financial Years 2017-2018, 2018-2019 & 2019-2020. Both the notices alleged that during the said period, the Petitioner availed and utilized Input Tax Credit (“ITC”), which was inadmissible in terms of Section 16(4) of the CGST Act/SGST Act. Pursuant to the Impugned SCN the Authority under the CGST Act passed an Order-in-Original on November 14, 2023 (“the Impugned Order”). Subsequently, the authority under the SGST Act passed an Order-in-Original on December 11, 2023 (“the Impugned Order”).
Hence, aggrieved by the circumstances, the present writ petition was filed.
Issue:
Whether two parallel proceedings in respect of the same period is permissible under GST Law?
Held:
The Hon’ble Guwahati High Court in Case No. WP(C)/ 683/2024 held as under:
- Observed that, Section 6(2) of the CGST and SGST Act which inter alia indicates that once a proceeding is initiated either of the above two acts, another proceeding for the same period under the other Act is not to be initiated, the operation of the Impugned Order shall remain suspended till the returnable date.
Our Comments:
Section 6 of the CGST Act talks about “Authorisation of officers of state tax or Union territory tax as proper officer in certain circumstances”. According to Section 6 (2)(b) of the CGST Act, if a proper officer under the SGST Act or the UTGST 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 Guwahati High Court’s ruling sets a precedent, emphasizing the prohibition of dual proceedings for the same period under the CGST and SGST Acts. This decision aligns with the legislative intent to avoid redundancy and ensures a streamlined and efficient adjudication process. As businesses navigate the complexities of GST compliance, understanding such legal nuances becomes paramount to safeguard against unnecessary legal complications.
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