Central GST summons valid despite parallel state GST assessment; searches can prompt separate investigatory inquiries

HC upheld validity of summons issued by central GST authorities despite parallel state GST assessment proceedings, holding that statute bars parallel assessments but not investigatory actions like summons issued after search. The court distinguished summons from an assessment, noting searches may uncover material unknown during original assessments and thus summons aid further inquiry. Because the search and resultant summons were not part of or interrelated to earlier assessment proceedings, there was no basis to quash them; petition dismissed.

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ISSUES PRESENTED and CONSIDERED:

1. Whether the summons issued by the Central Goods and Services Tax authorities are valid despite proceedings initiated by the State GST authoritiesRs.

ISSUE-WISE DETAILED ANALYSIS:

Relevant legal framework and precedents:

- Section 6(2)(b) of the Central Goods and Services Act, 2017

- Judgment of the Jharkhand High Court in Vivek Narsaria v State of Jharkhand (2024 SCC OnLine Jhar 50)

Court's interpretation and reasoning:

- The Court interpreted Section 6(2)(b) to prohibit parallel proceedings by different authorities on the same subject matter.

- The Court distinguished between a search/investigation and actual assessment proceedings under Sections 73 and 74 of the Act.

- The Court held that a summons issued during a search is intended to gather information and does not bar the authorities from taking further action based on the findings.

Key evidence and findings:

- Summons issued by the Central GST authorities following a search conducted on 16 January 2025.

- Proceedings initiated by the State GST authorities based on a Show Cause Notice dated 18 November 2024.

Application of law to facts:

- The Court found that Section 6(2)(b) does not prohibit the Central GST authorities from issuing summons during a search conducted post the State GST proceedings.

- The Court emphasized the distinction between a search/investigation and subsequent assessment proceedings.

Treatment of competing arguments:

- The petitioner argued that the State GST proceedings should take precedence over the Central GST summons.

- The Court rejected this argument, stating that the summons issued during a search is a preliminary step and does not hinder the authorities from further assessment.

Conclusions:

- The Court dismissed the writ petition challenging the validity of the summons issued by the Central GST authorities.

- The Court granted the petitioner liberty to request access to data stored on seized electronic devices from the competent Central GST authority for participation in the investigation.

SIGNIFICANT HOLDINGS:

- The Court clarified that Section 6(2)(b) does not bar the Central GST authorities from issuing summons during a search, as it is a preliminary step and does not hinder subsequent assessment proceedings.

- The Court upheld the validity of the summons issued by the Central GST authorities and dismissed the writ petition challenging the same.

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