Case Law Details
Kuppan Gounder P.G.Natarajan Vs Directorate General of GST Intelligence (Madras High Court)
Let us consider the scope of Section 6(2)(b) of the Act. It contemplates that “where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax 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”. Therefore, subjects proposed to be dealt with by the State authorities as well as the Central authorities must be one and the same to avail the benefit of Section 6(2)(b) of the Act. Even in such circumstances, if the aggrieved person is of an opinion that the subjects are one and the same, it is for him to establish the same before the competent authority by producing the records. Contrarily, such an adjudication in detail, cannot be conducted by the High Court in a writ proceedings under Article 226 of the Constitution of India. Various business transactions, its intricacies, the manner in which the accounting system is followed and the taxes paid, are to be elaborately scrutinized by the Department officials, who are having expertise in the subject. Such an adjudication, if entertained by the High Court, undoubtedly, there is a possibility of error, commission or omission at the instance of either of the parties and more over, based on the mere affidavit or counter affidavit filed by the parties, High Court cannot make a finding in respect of such disputed facts or issues. The very purpose and object of the Statute is to ensure that the investigation and proceedings are conducted in the manner known to law and then only, the truth may be culled out and during the process, the persons aggrieved are bound to establish their innocence or otherwise by producing the documents, evidences etc., Contrarily, intervention during the intermittent period by the High Court at the stage of summon, undoubtedly, would paralyze the entire proceedings, which is not desirable and even in such cases, where there are certain factual similarities or otherwise, the same is to be established by the person aggrieved by producing all original documents, evidences, etc.,
As far as Section 6(2)(b) of the Act is concerned, this Court is of the considered opinion that the State authorities issued a notice for intimating discrepancies in the return after scrutiny in proceedings dated 17.12.2020. The said proceedings would reveal that during the scrutiny of the return for the tax period referred certain discrepancies have been noticed. Regarding such discrepancies, the proceedings are initiated and is pending for adjudication. As far as the present summon is concerned, there was an order of seizure and earlier also, a summon was issued under Section 70 of the Act on 20.01.2021 and subsequently also, summons were issued and the investigations are in progress. The very purpose and object of Section 6(2) (b) of the Act is to ensure that on the same subject, the parallel proceedings are to be avoided. Once on a particular subject, the State authority has initiated action under the State Goods and Services Tax Act, then alone, the proper answer under the Central Goods and Services Tax Act are restrained to wait till the finalization of the proceedings initiated by the State authorities. However, in all circumstances, and in respect of various other proceedings, the benefit cannot be claimed by the assessees.
It is to be established that subject matter is one and the same. 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. Therefore, all these factors require an adjudication before the competent authority and if the summons are kept in abeyance at this stage, the same would paralyze the entire proceedings, which is not only desirable, but would cause prejudice to the interest of the Revenue in the present case.
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