State GST show cause notice vs parallel Central proceedings u/s6(2)(b); writ declined, taxpayer told to reply first.

A writ petition challenged a State GST show cause notice as barred by s.6(2)(b) of the TNGST Act, 2017, contending that the Central authority had already initiated proceedings on the same subject matter. The HC held that, at the show cause stage, the assessee must first submit a detailed reply raising all objections, including the statutory bar under s.6(2)(b), enabling the authority to adjudicate the grievance; given the authority's undertaking to consider those objections, writ interference was unwarranted. The petition was disposed of by permitting a reply within three weeks and directing the authority to pass a reasoned order on merits in accordance with law thereafter.

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Issues:
Challenge to show cause notice under TNGST Act, 2017 based on violation of Section 6(2)(b) - Similarity of defects in show cause notices issued by Central Authority and State Authority - Consideration of objections raised by petitioner - Relief sought by petitioner.

Analysis:
The petitioner challenged an impugned show cause notice issued under the Tamil Nadu Goods and Service Tax Act, 2017, citing a violation of Section 6(2)(b) of the Act. The petitioner contended that a similar notice was issued by the Central Authority under the CGST Act, 2017, involving identical defects. As per Section 6(2)(b) of the TNGST Act, when proceedings are initiated by the proper officer under the CGST Act on the same subject matter, no fresh proceedings can be initiated under the TNGST Act. The petitioner argued that the defects highlighted in both notices were the same, thus precluding the initiation of new proceedings under the TNGST Act.

During the hearing, the Government Advocate for respondent No.1 presented written instructions indicating that if the petitioner submits a detailed reply to the show cause notice, defects similar to those in the notice issued by the Central Authority would be omitted. The petitioner maintained that the defects in both notices were identical, emphasizing the prohibition on initiating fresh proceedings under the TNGST Act when the Central Authority has already taken action on the same subject matter.

The Court examined Section 6(2)(b) of the TNGST Act, which prohibits the initiation of proceedings by the State Authority if the Central Authority has already initiated proceedings on the same subject matter. The respondents assured the Court that they would consider the objections raised by the petitioner once a detailed reply was submitted. The Court emphasized the necessity for the petitioner to provide a comprehensive response to the show cause notice to enable the respondents to evaluate the objections raised, including those related to Section 6(2)(b) of the TNGST Act.

Ultimately, the Court disposed of the Writ Petition by directing the petitioner to submit a detailed reply to the show cause notice within three weeks. Upon receipt of the reply, the first respondent was instructed to pass final orders within four weeks, considering the objections raised by the petitioner. The Court refrained from granting any costs and closed the connected Writ Miscellaneous Petition. The judgment focused on ensuring the petitioner's right to respond effectively to the show cause notice and the subsequent consideration of objections by the respondents within a specified timeframe.

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