Section 6(2)(b) WBGST blocks parallel State GST action, protects taxpayer from coercive recovery without extra pre-deposit

HC held that, in light of Section 6(2)(b) WBGST Act, parallel proceedings by State authorities cannot continue where comprehensive investigation and show cause proceedings on the same subject matter have already been initiated by Central authorities (DGGI). Observing that the Central proceedings preceded and were wider in scope, HC restrained the State authorities from taking any coercive recovery steps pending disposal of the writ petition. The condition imposed by the Single Judge requiring pre-deposit of 20% of the disputed tax as a prerequisite for interim protection was set aside. Time for filing affidavits was extended, and the writ petition was directed to proceed.

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Issues involved:
The judgment involves issues of payment of disputed tax for interim protection, the authority to proceed with parallel proceedings by State and Central Authorities, and the binding effect of a decision by the High Court of Bombay on West Bengal State Tax Authorities.

Issue 1: Payment of disputed tax for interim protection
The writ petitioners appealed against an order requiring them to pay 20% of the disputed tax for interim protection. The question arose whether this condition could be imposed after already paying 10% of the disputed tax while appealing. The Act allows appealing to the Tribunal after the first appellate authority's decision, necessitating the writ petition.

Issue 2: Parallel proceedings by State and Central Authorities
The main issue was whether State and Central Authorities can proceed simultaneously on the same subject matter. Section 6(2)(b) of the West Bengal Goods and Services Tax Act, 2017 prohibits parallel proceedings. The Central Authority initiated proceedings before the State Authority, leading to a request for dropping State proceedings. The Central investigation was more comprehensive, covering multiple parties, raising doubts on the State's authority to proceed.

Issue 3: Binding effect of High Court of Bombay's decision
The appellants relied on a High Court of Bombay decision regarding GST Appellate Tribunal formation and limitation extension. The State argued that this decision does not bind West Bengal State Tax Authorities. The judgment concluded that recovery proceedings should be stayed without pre-conditions until the writ petition's disposal, setting aside the 20% disputed tax deposit requirement.

Conclusion:
The High Court of Calcutta ruled in favor of the writ petitioners, setting aside the requirement to pay 20% of the disputed tax for interim protection. Recovery proceedings were stayed without imposing pre-conditions until the writ petition's disposal. The State was given an extended time to file an affidavit-in-opposition, with a subsequent reply period. The writ petition was disposed of with these observations.

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