Case Law Details
Subhash Agarwalla Vs State of Assam And 4 Ors (Guwahati High Court)
Introduction: In a significant judgment, the Guwahati High Court, in the case of Subhash Agarwalla Vs State of Assam And 4 Ors, has addressed a crucial issue concerning the Central Goods and Services Tax (CGST) and the State Goods and Services Tax (SGST) Acts. The court deliberated on whether two parallel proceedings under the CGST and SGST Acts for the same period are permissible, offering a clear interpretation of the legal provisions.
Detailed Analysis: The petitioner, Subhash Agarwalla, was subjected to two demand-cum-show cause notices; one under the SGST Act and another under the CGST Act for the financial year 2017-2018. Both notices questioned the Input Tax Credit (ITC) availed and utilized by the petitioner, alleging it was inadmissible as per Section 16(4) of both Acts. Following these notices, orders-in-original were passed by the respective authorities under the CGST and SGST Acts.
The petitioner’s main contention was based on Section 6 of both the CGST and SGST Acts, which essentially precludes the initiation of parallel proceedings for the same period under both acts. This provision aims to avoid duplicity and ensure that the assessee is not penalized or troubled for the same transaction under both jurisdictions.
The Guwahati High Court, upon reviewing the matter, highlighted the importance of Section 6 in maintaining procedural coherence between the CGST and SGST Acts. The court’s interim order suspended the operation of the order-in-original issued under the SGST Act, thereby granting temporary relief to the petitioner until a detailed examination on the returnable date.
Conclusion: The Guwahati High Court’s decision in Subhash Agarwalla Vs State of Assam And 4 Ors underscores the judiciary’s role in interpreting tax laws in a manner that ensures fairness and legal certainty for taxpayers. By recognizing the non-permissibility of parallel proceedings under the CGST and SGST Acts for the same period, the court has reinforced the principle of avoiding unnecessary litigation and ensuring a cohesive legal framework for GST implementation. This judgment is a critical reminder of the need for tax authorities to adhere strictly to the legislative provisions, ensuring that taxpayers’ rights are protected while maintaining the integrity of the tax system.
FULL TEXT OF THE JUDGMENT/ORDER OF GUWAHATI HIGH COURT
Heard Mr. R.S. Mishra, learned counsel for the petitioner; Mr. B. Choudhury, learned Standing Counsel, Finance and Taxation Department for the respondent nos. 1, 2 & 3; and Mr. S.C. Keyal, learned Standing Counsel, CGST for the respondent nos. 4 & 5.
2. An authority under the SGST Act issued a Demand–cum–Show Cause Notice under Section 73 of the SGST Act on 23.11.2022 [Annexure-C] asking the petitioner to show cause as to why the amount indicated therein shall not be demanded and recovered from the petitioner-assessee for the Financial Year :- 2017-2018. An Authority under the CGST Act had thereafter, issued a Demand–cum–Show Cause Notice on 04.2023 also under Section 73 of the CGST Act asking the petitioner as to why the amount indicated therein shall not be demanded and recovered from the petitioner-assessee for the Financial Years : 2017-2018, 2018-2019 & 2019-2020. Both the notices had alleged that during the said period, the petitioner-assessee availed and utilized Input Tax Credit [ITC] for the amounts, indicated therein, which were inadmissible in terms of Section 16[4] of the CGST Act/SGST Act. Pursuant to the Show Cause Notice dated 27.04.2023, the authority under the CGST Act has passed an Order-in-Original on 14.11.2023 [Annexure-E]. Subsequently, the authority under the SGST Act has passed an Order-in-Original on 11.12.2023 [Annexure-F].
3. It is the contention of the writ petition that two parallel proceedings in respect of the same period, that is, 2017-2018 is not permissible under the provisions of Section 6 of the CGST Act, 2017 and SGST Act, 2017.
4. Issue notice, returnable on 18.03.2024.
5. As Choudhury has appeared and accepted notices on behalf of the respondent nos. 1, 2 & 3; and Mr. Keyal has appeared and accepted notices on behalf of the respondent nos. 4 & 5, no formal notices need to be issued in respect of the said respondents. The learned counsel for the petitioner shall serve requisite nos. of extra copies of the petition along with annexures, to Mr. Choudhury and Mr. Keyal within 2 [two] working days from today.
6. Having regard to the provisions contained in Section 6 of the CGST/SGST Act, more particularly, Section 6[2] 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 Order-in-Original dated 11.12.2023 [Annexure-F] passed by the respondent 3 shall remain suspended till the returnable date.
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