Tax Authorities Blocked from Simultaneous Proceedings: Taxpayer Wins Interim Relief Under HPGST/CGST Act Sections

The HC examined a tax liability dispute under HPGST/CGST Act involving potential duplicate proceedings against a taxpayer. The court found a prima facie case favoring the petitioner and granted a stay on the tax order dated 20.05.2023, recognizing potential irreparable harm from simultaneous tax proceedings by Central and State authorities. The interim order prevents enforcement pending further judicial review.

---

---

Issues involved:
The issues involved in the judgment are related to the imposition of tax liability under Section 74 of the HPGST/CGST Act, 2017 on the petitioner for supplies received from M/S R.J. Trading, and the alleged duplication of proceedings by the authorities.

Imposition of Tax Liability:
The respondent No. 2 had issued summons under Section 70 of the HPGST/CGST Act, 2017 for the period from 01.01.2021 to 30.06.2021 regarding supplies received by the petitioner from M/S R.J. Trading. A show cause notice under Section 74(1) was issued based on the petitioner's reply, followed by an order imposing tax liability under Section 74(9) along with interest and penalty. The petitioner raised concerns about duplication of proceedings as similar proceedings had already been concluded with the Central authorities.

Duplication of Proceedings:
The petitioner highlighted that summons were previously issued by the Central Authorities under the Central Goods and Excise Taxation Act, 2017 for the period from 01.07.2017 to 30.06.2021 regarding dealings with M/S R.J. Trading. The petitioner had deposited the GST liability amount with the Central authorities, resulting in the closure of those proceedings. The petitioner argued that being pursued for the same liability by both Central and State authorities amounted to vexation and double jeopardy.

Court's Decision:
Considering the submissions and documents on record, the court found a prima facie case in favor of the petitioner. The court also noted that the balance of convenience favored the petitioner, and there was a risk of grave irreparable loss if the impugned order dated 20.05.2023 was enforced. Therefore, the court stayed the impugned order pending further proceedings, acknowledging the potential harm to the petitioner if the respondents were not restrained from implementing the order.

---