GST investigation may proceed despite pending tax demand notice where proceedings are distinct in scope and subject matter.

The High Court held that a pending State GST show-cause proceeding did not bar a separate GST intelligence investigation and summons. The two actions were different in character and scope: the earlier proceeding related to tax demand and input tax credit on intra-State transactions, while the later investigation arose from secret information and a raid concerning an alleged bogus invoice racket and ineligible input tax credit. The Court accepted the distinction between adjudication of tax liability and investigation into offences under the GST law, and found the statutory bar inapplicable. The challenge to the investigation and summons therefore failed.

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Issues: Whether the investigation and summons initiated by the GST intelligence authorities were barred by the pendency of a separate show-cause proceeding before the State GST authorities under the CGST regime.

Analysis: The pending tax-demand proceedings and the impugned investigation were found to be different in character and scope. The earlier proceeding concerned tax demand and input tax credit issues arising from intra-State transactions, whereas the later action arose from secret information and raid-based investigation into a larger alleged racket of bogus invoices and illegal availment of ineligible input tax credit. The Court held that the statutory bar relied upon by the petitioner was not attracted because the subject matter and nature of the two proceedings were not the same. It also accepted the distinction between adjudication of tax liability and investigation into offences punishable under the Act.

Conclusion: The challenge to the investigation and summons failed; the petition was rejected.

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