Parallel GST proceedings require identical subject matter; distinct ITC allegations permit Central proceedings and defeat the statutory bar.
Section 6(2)(b) bars subsequent Central GST proceedings only where earlier State GST proceedings concern the identical subject matter. Turnover reconciliation proceedings and proceedings based on search material alleging non-existent suppliers, wrongful input tax credit, and invoices without corresponding supplies involved distinct allegations and evidence; the parallel-proceedings bar therefore did not apply. Multiple notices sent by speed post and registered email, followed by non-appearance and no substantive reply, constituted adequate hearing opportunity, so the ex parte order was not vitiated. Section 16(2)(c) remains constitutionally valid following High Court and Supreme Court affirmation. The merits of the input tax credit demand were not adjudicated.
Issues: (i) Whether the parallel CGST proceedings were barred by Section 6(2)(b) because DGST had earlier initiated proceedings on the same subject matter; (ii) Whether the ex parte order was passed in breach of principles of natural justice; and (iii) Whether Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 is unconstitutional.
Issue (i): Whether the parallel CGST proceedings were barred by Section 6(2)(b) because DGST had earlier initiated proceedings on the same subject matter.
Analysis: Section 6(2)(b) bars proceedings by a proper officer under the Central enactment only where proceedings under the State enactment were initiated earlier and both proceedings concern the same subject matter. The DGST proceedings arose from reconciliation of turnover declared in GSTR-3B returns, whereas the CGST proceedings were founded on search material concerning non-existent suppliers, wrongful availment of ITC, and issuance of invoices without corresponding supplies. The allegations, evidentiary material and defaults were therefore distinct.
Conclusion: Against the assessee: Section 6(2)(b) did not bar the CGST proceedings, and the show-cause notice and adjudication order were not non est.
Issue (ii): Whether the ex parte order was passed in breach of principles of natural justice.
Analysis: Multiple hearing notices were sent through speed post and registered e-mail. The assessee neither appeared on the notified dates nor filed a substantive response to the show-cause notice, having only sought additional time and a hearing.
Conclusion: Against the assessee: adequate opportunity of hearing was afforded, and the ex parte order was not vitiated by breach of natural justice.
Issue (iii): Whether Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 is unconstitutional.
Analysis: The provision had been held intra vires by a High Court, and that view was affirmed by a speaking order of the Supreme Court. The constitutional position was consequently treated as settled.
Conclusion: Against the assessee: Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 remains intra vires and constitutionally valid.
Final Conclusion: The statutory bar was inapplicable, no denial of hearing was established, and the constitutional challenge could not be sustained; the merits of the ITC demand remain unadjudicated.
Ratio Decidendi: The statutory bar on parallel GST proceedings operates only when prior proceedings under the State enactment and the subsequent proceedings concern the identical subject matter; distinct allegations and evidentiary foundations preclude its application.