2023 (7) TMI 99 - HC - GST

Parallel GST inspection and inquiry vs repeated s.70 summons for same documents; papers consolidated u/s67 officer, petition allowed.

Parallel GST proceedings arose where one departmental officer conducted inspection and inquiry under s.67(1) CGST/SGST Act, 2017, while other officers ... Preclusive effect of prior initiation of proceedings - transfer of proceedings between tax authorities - inspection under Section 67(1) of the CGST Act - prohibition on initiation of duplicate proceedings - summons under Section 70 of the Act - co-operation with ongoing investigationPreclusive effect of prior initiation of proceedings - transfer of proceedings between tax authorities - inspection under Section 67(1) of the CGST Act - Respondents no. 1 and 2 were directed to transfer the papers/documents relating to the inquiry to respondent no. 4 and to desist from proceeding separately in respect of the same subject matter. - HELD THAT: - The Court recorded that respondent no. 4 had earlier carried out an inspection at the petitioner's premises on 10.12.2021 under Section 67(1) of the CGST Act and that an inquiry initiated by respondent no. 4 was then pending in respect of multiple firms including the firms for which respondents no. 1 and 2 had issued summons. Having regard to the antecedent inspection and ongoing inquiry by respondent no. 4, the Court accepted the petitioner's contention that parallel proceedings on the same subject matter ought not to be pursued. In consequence, and to avoid duplication of inquiries, respondents no. 1 and 2 were directed to transfer the records to respondent no. 4 so that the ongoing investigation may proceed centrally before respondent no. 4. The Court further directed the petitioner to cooperate with respondent no. 4 and produce the required documents, and left it open to respondent no. 4 to take appropriate action thereafter in accordance with law. [Paras 5, 6]Petition allowed to the extent that respondents no. 1 and 2 shall transfer the relevant papers/documents to respondent no. 4 for necessary inquiry and the petitioner shall cooperate with respondent no. 4.Final Conclusion: The petition is allowed insofar as respondents no. 1 and 2 are directed to transfer the records of inquiry to respondent no. 4 (DGGI Vadodara) for continuation of the ongoing investigation; the petitioner must cooperate and produce documents to respondent no. 4, and respondent no. 4 may thereafter take action as per law. Issues involved: Petition under Article 226 for transfer of proceedings and documents, quashing of summons, interpretation of Section 6(2)(b) of CGST Act.Summary:Issue 1: Transfer of Proceedings and Documents The petitioner sought direction to transfer proceedings and documents from respondent no. 1 and 2 to Directorate General of GST Intelligence, Vadodara Regional Unit. The petitioner also requested respondent no. 4 to complete the proceedings promptly and to quash the summons issued by respondent no. 1.Issue 2: Interpretation of Section 6(2)(b) of CGST Act The petitioner argued that as per Section 6(2)(b) of the CGST Act, no proceedings should be initiated by another proper officer on the same subject matter once proceedings have been initiated by a proper officer under the Act. The petitioner contended that since respondent no. 4 had already initiated an investigation, respondents no. 1 and 2 should transfer the inquiry to respondent no. 4.Judgment: The Court heard arguments from both sides and noted that respondent no. 4 had initiated an inquiry and inspection regarding multiple firms, including the petitioner's firm. Considering this, the Court directed respondents no. 1 and 2 to transfer all documents to respondent no. 4 for investigation regarding both M/s. J.M. Enterprise and M/s. Galaxy Enterprise. The petitioner was instructed to cooperate with respondent no. 4 by providing necessary documents for the inquiry. The Court allowed the petition to the extent of transferring the proceedings and documents to respondent no. 4 for further action in accordance with the law.