2025 (9) TMI 1458 - HC - GST

Summons under Section 6(2)(b) CGST rendered redundant after consensual meeting and petitioner's grievance redressed; petition disposed

HC held that summons issued on 20.10.2023, 22.12.2023, 29.11.2024 and 11.12.2024 under Section 6(2)(b) CGST had become redundant and unenforceable in ... Jurisdiction to issue summons - Section 6(2)(b) of the Central Goods and Service Tax Act, 2017 - petitioner submits that grievance of the petitioner stands redressed and nothing survives to be adjudicated. HELD THAT:- There was a meeting on the basis of consensus, in view of which summons dated 20.10.2023 (Annexure P-7), 22.12.2023 (Annexure P-9), 29.11.2024 (Annexure P-11) and 11.12.2024 (Annexure P-14), issued by the respondent No. 2 have become redundant and unenforceable. Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether summons issued by the investigating authority (respondent No. 2) on specified dates are without jurisdiction and contrary to Section 6(2)(b) of the Central Goods and Services Tax Act, 2017. 2. Whether, where the State Taxes & Excise Department has already initiated investigation/proceedings in respect of specified suppliers and the case records have been accepted/transferred between enforcement units, further investigation by the DGGI in respect of those suppliers becomes redundant and unenforceable. 3. What consequential directions, if any, should follow when the investigating agencies reach a consensus that investigation by one agency will not continue and records are to be forwarded to the other agency for action. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Jurisdiction of summons vis-à-vis Section 6(2)(b) CGST Act Legal framework: Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (as invoked in the petition) concerns allocation of functions and jurisdiction between the Centre and States in respect of GST enforcement and related matters; the petition challenged summons as being issued 'in the teeth of' that provision. Precedent Treatment: No reported judicial precedents were relied upon by the Court and none were cited or applied in the oral judgment; therefore no precedent was followed, distinguished, or overruled. Interpretation and reasoning: The Court did not conduct a detailed adjudication on the legal question of statutory interpretation of Section 6(2)(b). Instead, factual material placed on record (minutes of the meeting dated 15.09.2025) established that the State Taxes & Excise Department had already initiated investigation proceedings in respect of the same suppliers and that the matter had been the subject of inter-agency communication and transfer of records. On the basis of those recorded facts and the consensus decision by the investigating officers that DGGI would not continue investigation in respect of the eight suppliers, the Court concluded that the summons issued by the DGGI had become redundant and unenforceable. Ratio vs. Obiter: The holding that the particular summons had become redundant and unenforceable in the light of the inter-agency decision and transfer of records constitutes the operative ratio in respect of these proceedings. Any broader pronouncement on the general application or scope of Section 6(2)(b) was not made and would be obiter if attempted; the Court refrained from such general adjudication. Conclusions: The Court concluded that, on the facts and the consensus recorded between the agencies, the challenged summons (dated 20.10.2023, 22.12.2023, 29.11.2024 and 11.12.2024) are redundant and unenforceable. No separate determination on the abstract question of statutory jurisdiction under Section 6(2)(b) was undertaken. Issue 2 - Effect of prior/ongoing State investigation and transfer of records on continued DGGI proceedings Legal framework: Administrative coordination between Central and State investigatory/enforcement agencies and the effect of record-transfer/consensus decisions on the enforceability of investigatory steps (such as summons) issued by one agency while another has initiated investigation. Precedent Treatment: The Court did not reference or rely on any precedents addressing inter-agency coordination; the decision was fact-driven and based on the minutes produced by the parties. Interpretation and reasoning: The minutes placed on record recited (a) the territorial and enforcement jurisdictional history of the taxpayer and its district following departmental restructuring; (b) that the State Taxes & Excise had initiated proceedings (Case ID AD0201230011273) in respect of the input tax credit and listed eight suppliers; (c) that original records were transmitted from the erstwhile enforcement zone to the Centre Zone and that the case had been transferred; and (d) a concluded consensus that no further investigation by DGGI in respect of those eight suppliers would be continued and that the case records with DGGI would be forwarded to the State Taxes & Excise for necessary action. Given those factual findings and the agencies' agreement, the Court reasoned that continued enforcement of the DGGI summons directed at the same subject-matter would be redundant and unenforceable. Ratio vs. Obiter: The specific holding that continuation of DGGI summons was rendered unenforceable by the agencies' consensus and transfer of records is ratio as applied to these facts. The Court did not generalize this principle beyond the recorded facts and did not lay down a broad rule governing all inter-agency conflicts; any such generalization would be obiter. Conclusions: The Court concluded that, because the State had initiated investigation into the same suppliers and inter-agency agreement transferred responsibility/records to the State enforcement authority, the DGGI summons were no longer enforceable and stood rendered redundant. The petitioner's grievance was thus held to be redressed. Issue 3 - Consequences and directions following inter-agency consensus to discontinue investigation by one agency Legal framework: The Court's power to fashion relief and give directions when agencies reach a consensus and when overlapping proceedings arise; administrative law principles of coordination and avoidance of duplication. Precedent Treatment: No judicial authorities were invoked to articulate the scope of consequential directions; the Court acted on the factual record and parties' positions. Interpretation and reasoning: Having recorded the agreement that DGGI would not continue investigation in respect of the eight suppliers and would forward case records to the State enforcement office, the Court observed that the summons issued by DGGI had become redundant and unenforceable. The Court further observed that respondent No. 1 (the State) shall proceed further in accordance with law to take the matter to its logical end, if not completed. Ratio vs. Obiter: The directive that the State shall proceed in accordance with law is an operative direction flowing from the Court's disposal of the petition and is ratio with respect to ensuring proper conclusion of the matter; it is not a pronouncement on how the State must proceed substantively in future investigations. Conclusions: The Court disposed of the petition on the basis that the grievance was redressed by the inter-agency decision; it declared the challenged summons redundant and unenforceable and directed respondent No. 1 to proceed in accordance with law to conclude any remaining or transferred proceedings. No further adjudication on merits or on the statutory contours of jurisdiction was undertaken.