TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 991
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.... the CGST Act ......................30 c. Scope and Ambit of "initiated any proceedings" under Section 6(2)(b) of the CGST Act ......................42 i. Reading of Circular dated 05.10.2018 ......................50 II. Whether "subject matter" within the meaning of Section 6(2)(b) of the CGST Act includes all matters dealt with in summons under the Act? ......................52 III. What is the purport of an "Order" under Section 6(2)(a) of the CGST Act? ......................59 E. CONCLUSION ......................61 1. This matter was notified for admission on 06.03.2025. After hearing the learned Counsel appearing for the petitioner at length, and upon a threadbare examination of the reasoning assigned by the High Court, we decided to dismiss the Special Leave Petition. However, considering the nature of the issue involved, we thought it appropriate to assign reasons, and accordingly reserved the order. 2. This petition arises from the judgment and order passed by the High Court of Delhi dated 07.02.2025 in W.P.(C) No. 1082 of 2025 ("Impugned Order"), by which the High Court dismissed the writ petition filed by the petitioner herein, and declined from interdicting the su....
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....dismissed the writ petition preferred by the petitioner and thereby declined to interfere with the summons issued to the petitioner on 16.01.2025 and 23.01.2025 respectively. The Court held that the expression "any proceeding" in Section 6(2)(b) cannot be construed to include a search or investigation. The High Court took the view that a summons or investigation pursuant to a search constitutes only a precursor to the formal proceedings. It distinguished such summons from assessment, noting that summons is primarily intended to elicit information. 9. The High Court noted that the intent of the statute is to prevent parallel proceedings relating to assessment, particularly those initiated under Sections 73 and 74 respectively of the CGST Act or any other analogous provisions. At the stage of issuing summons, the authorities are merely engaged in gathering information from the assessee based on the material collected thus far, as it is not yet possible to determine the specific course of action the authority intends to pursue. 10. Lastly, the High Court considered the decision of the High Court of Jharkhand in Vivek Narsaria v. State of Jharkhand, reported in 2024 SCC OnLine Jhar 5....
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....tate or Central authority initiates proceedings, the other is expected to act in aid of those proceedings and provide all necessary inputs to ensure their effective culmination. However, the simultaneous exercise of jurisdiction in the form of a parallel investigation on the same subject matter, he argued, runs contrary to the principle of harmony. 15. Mr. Potaraju relied upon D.O. F.No. CBEC/20/43/01/2017-GST (Pt.) dated 05.10.2018, issued by the Central Board of Excise & Customs, Ministry of Finance, to fortify his submission that the mandate of Section 6 of the CGST Act envisages a harmonious exercise of powers by the State and Union authorities. The Circular reads thus; "Dear Colleague, It has been brought to the notice of the Board that there is ambiguity regarding initiation of enforcement action by the Central tax officers in case of taxpayer assigned to the State tax authority and vice versa. 2. In this regard, GST Council in its 9th meeting held on 16.01.2017 had discussed and made recommendations regarding administrative division of taxpayers and concomitant issues. The recommendation in relation to cross-empowerment of both tax authorities for enforcement of intel....
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....n K.P. Mohammed Salim v. CIT, reported in (2008) 11 SCC 573. Furthermore, Section 6 of the CGST Act, is part of Chapter II of the Act which deals with Administration. As a sequitur, it ought to apply to all the "proceedings" contemplated under the subsequent provisions. 18. Lastly, Mr. Potaraju emphasized that officers under the GST regime are governed by the provisions set out in Chapter II of the CGST Act. He pointed out that the term "proper officer," as defined in Section 2(91) of Chapter I, refers to any officer assigned with any function under the Act. The CGST Act, he argued, does not draw distinctions or impose limitations on the exercise of powers by a proper officer. Rather, the definition operates as an overarching provision, uniformly applicable across the various Chapters of the Act. 19. In such circumstance referred to above, he prayed that there being merit in the present appeal, the same may be allowed and the Impugned Order passed by the High Court may be set aside and the summons dated 16.01.2025 and 23.01.2025 respectively be declared as having been issued without jurisdiction. D. ANALYSIS 20. Having heard the learned Counsel appearing for the petitioner and ....
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....ounded on an identical cause of action. The relevant observations read as under: "10. The words "subject-matter", "proceedings" and "inquiry" have not been defined either under the State GST Act or the Union Territory GST Act or the CGST Act. Therefore, these words have to be interpreted in the context of the aforesaid Acts. The word "inquiry" in section 70 has a special connotation and a specific purpose to summon any person whose attendance may be considered necessary by the proper officer either to give evidence or to produce a document or any other thing. It cannot be intermixed with some statutory steps which may precede or may ensue upon the making of the inquiry or conclusion of inquiry. The process of inquiry under section 70 is specific and unified by the very purpose for which provisions of Chapter XIV of the Act confers power upon the proper officer to hold inquiry. The word "inquiry" in section 70 is not synonymous with the word "proceedings", in section 6(2)(b) of the UPGST Act/CGST Act. xxx 12. Provisions of section 70 has been enacted for collecting evidence in matters involving tax evasion which may also lead to confiscation. After inquiry is completed and mat....
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....(b) and 70 respectively, are different and distinct, as the former deals with any proceedings on a same subject matter, whereas, the latter deals with power to summon in an inquiry and therefore, the words "proceedings" and "inquiry" cannot interchangeably be used to say that there is a bar to invoke the power under Section 70 of the CGST Act. The Court referred to the proceedings under Section 67, 68, 69, 71 and 72 respectively as "inquiry". It was further observed that the prohibition under Section 6(2)(b) shall come into play when any proceedings on the same subject matter had already been initiated by a proper officer of another tax authority. The relevant observations read as under: "31. We need to take note of the word "inquiry" occurring in Section 70 of the CGST Act and the proper officer has power to summon any person whose attendance he considers necessary to give evidence or to produce a document or any other thing in any inquiry, in the same manner, as provided in the case of a Civil Court. The bar contained under Section 6(2)(b) of the CGST Act is with regard to any proceedings initiated by a proper officer on a subject matter, on the same subject-matter, the proper ....
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....th the Central GST authorities and appear as and when required by them to do so. 15. Learned counsel for the Appellant states that the Appellant has already been cooperating and would continue to do so as far as the proceeding initiated by the DGGSTI (Opposite Party No. 1) is concerned. 16. It may be noted that the period of enquiry as far as Central tax authority is concerned is from July, 2017 to June, 2018 whereas Opposite Party No. 3 has issued a show cause notice specific for March, 2018 and, therefore, there is also an overlapping of the periods. xxx 18. For the reasons noted above, the Court quashes the show cause notice dated 23rd July, 2019, the impugned order dated 5th November, 2019 including the order dated 4th November, 2019 all passed by Opposite Party No. 3 and directs that till the conclusion of the proceeding initiated against the Appellant by the DGGSTI, no coercive action be taken against the Appellant by the Opposite Party No. 3." (Emphasis supplied) 26. In Indo International Tobacco Ltd. v. Vivek Prasad, reported in 2022 SCC OnLine Del 90, the petitioner approached the High Court of Delhi, aggrieved by multiple search operations and summons. A search....
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.... transfer the said case to the authority otherwise having administrative assignment over the taxpayer. 65. The above circular is one example where section 6 shall have its full play. In terms of section 6(1), the State or the Central Tax Officer as the case maybe, is also authorised to act as the "proper officer" for the purposes of the other Act-CGST or the SGST Act as the case maybe. Therefore, when such officer initiates "intelligence based enforcement action", he acts and is empowered to so act not only under the CGST Act but also under the SGST or the UTGST Act. In terms of section 6(2)(a), he has to pass a comprehensive order, both under the CGST and the SGST/UTGST Act. In terms of section 6(2)(b), as he has initiated "intelligence based enforcement action", the other jurisdiction officer must hold his hands and the officer initiating such "intelligence based enforcement action" need not transfer the case to the jurisdiction officer to whom otherwise the taxpayer is administratively assigned. xxx 67. A bare reading of section 6 of the CGST and the abovementioned circular, on first blush, supports the interpretation put forth by the learned senior counsel for the appella....
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....therwise having jurisdiction over the taxpayer, strictly enforcing the mandate of section 6 and the above mentioned circular, will on the one hand subject the taxpayer to multiple action(s) (which is completely contrary to the intent of the Act as noted hereinabove), while on the other hand lead to multiple authorities expending their time, energy and resources investigating the same "intelligence" input, may be even reaching to conflicting findings. It is settled principle of interpretation of statute that the court must adopt construction which will ensure smooth and harmonious working of the statute and eschew the other which will lead to absurdity or give rise to practical inconvenience or friction or confusion in the working of the system. (Refer : State of Punjab v. Ajaib Singh AIR 1953 SC 10 ; Collector of Customs, Baroda v. Digvijaysinhji Spinning & Weaving Mills Ltd. AIR 1961 SC 1549)" (Emphasis supplied) 27. The High Court of Kerala in K.T. Saidalavi v. State Tax Officer, reported in 2024 SCC OnLine Ker 5674, dealt with a case where the Central GST authority had initiated an enquiry concerning non- payment of GST, directing the production of certain records, followed b....
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.... "proceedings" under Section 6(2)(b) of the CGST Act and "inquiry" under Section 70 cannot be conflated to imply a bar on the issuance of summons. It held that the mere issuance of summons does not amount to the initiation of proceedings under Section 6(2)(b). The relevant observations read as under: "11. In the judgments referred to by counsel for the respondents, it is held that scope of Section 6(2)(b) and Section 70 of the CGST Act is different and distinct, as the former deals with any proceedings on subject matter, whereas the latter deals with power to issue summon in an inquiry and therefore, the words "proceedings" and "inquiry" cannot be mixed up to read as if there is a bar for the respondents to invoke the power under Section 70 of the CGST Act. In "G.K. Trading Company vs. Union of India", the Allahabad High Court has held that issuance of summons is not initiation of proceedings referable to under Section 6(2)(b) of the CGST Act. Similar is the view of Madras High Court in "Kuppan Gounder P.G. Natarajan vs. Directorate General of GST Intelligence, New Delhi", wherein, Court has also held that in issuance of summons for conducting an inquiry and to obtain a statement....
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....OnLine Mad 8234, considered a challenge to summons issued by both the State and Central GST authorities. The petitioner therein contended that simultaneous proceedings by both authorities on the same subject matter were impermissible. The Court held that it was not permissible for the State GST authorities to prosecute the petitioner therein again, as the Central GST authority had already initiated action in respect of the same matter. However, the Court granted the petitioner an opportunity to participate in the proceedings initiated by the State GST authority to ascertain whether both sets of proceedings indeed pertained to the same subject matter. The relevant observations are reproduced herein: "5. Admittedly, no final decision has been taken by the fifth respondent to initiate action against the appellant under the TNGST Act, 2017. The appellant has only been called upon to produce documents under the impugned Summons dated 18-10-2022 and he has also been called to come for personal hearing. Admittedly, the appellant has not participated in the personal hearing and instead he has chosen to file this Writ Petition, challenging the impugned Summons. Necessarily, to substantiat....
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.... enquiry or investigation initiated by any authority is interrelated. It held that as the State authorities had initiated the same proceeding for wrong/illegal availment of input tax credit, the DGGI does not possess any special powers exceeding those conferred on the officers of the State GST authorities. Accordingly, the Court directed the Preventive Wing of the Central GST authority and the DGGI to transfer their investigation in relation to the petitioner therein to the State GST authorities. The relevant observations read as under:- "14. Having heard the arguments advanced by respective parties and having perused the documents brought on record and the statements and averments made in the respective counter-affidavits and materials available on record, we find that bare perusal of section 6 of the Act, especially section 6(2)(b), when read with the Clarification dated October 5, 2018, further read with Clarification dated June 22, 2020, when read together, it clearly denotes and implies that it is a chain of a particular event happening under the Act and every and any enquiry/investigation carried out at the behest of any of the Department are interrelated. Even if, we accep....
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....mplate the transfer of proceedings from one proper officer to another. Accordingly, no authority has the power to transfer a case from its jurisdiction to another, nor can any authority direct such a transfer. The Court held that actions taken by a proper officer under the Act were in the nature of judicial proceedings, which cannot be transferred through administrative orders. It further held that both the State and Central GST authorities are vested with equal powers under the relevant GST enactments, and once proceedings have been initiated by one authority, the same cannot be transferred to another. The relevant observations read as under: "22. We have considered his submission but find ourselves unable to accept the same in terms of scheme of the GST Act. As noticed above, the GST Act of 2017 empowers both the State authority as well as Central authority with equal powers. Once we have held that the proceedings are in the nature of judicial proceedings. The corollary, such judicial proceedings cannot be transferred by administrative actions. Merely because the DGGI has information relating to similar fraudulent availment of ITC by other firms who may be related to the firm a....
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....x credit by fraudulent means. Thus, if the State has already initiated proceedings by issuing notice under section 74 of the Act for the period up to July 22, 2019, for the same subject- matter, the DGGI cannot be allowed to initiate proceedings for the availment of input-tax credit by fraudulent means for the period from July 28, 2019 to January 20, 2022. Such action, if allowed, would be contrary to the provisions contained in section 6(2)(b) of the Act." ( Emphasis supplied ) 33. The High Court of Himachal Pradesh in Kundlas Loh Udyog v. State of H.P., reported in 2024 SCC OnLine HP 4810, dealt with a case where the petitioner was issued summons by the State GST authorities, directing him to furnish details of all suppliers from September 2021, for the tax period spanning April 2019 to December 2023. Subsequently, the petitioner therein received summons from the Central GST authority concerning supplies made by five specific suppliers. The petitioner informed the Central authorities that proceedings with respect to the named suppliers had already been initiated by the State authorities and that the relevant documents had been submitted to them. Nevertheless, the Central aut....
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....authority to the Central authority or vice-versa. 26. The object of Section 6(2)(b) of the Act is to avoid multiple proceedings by the Sales Tax Officer and Central Tax Officer on the same subject matter and the Rules of purposive interpretation requires Section 6(2)(b) of the Act to be read in light of this object. xxx 32. It would be an entirely different matter that if there would have been another firm which has also been found to be availing fraudulent ITC, then the central government authorities would not be precluded from taking action against that firm. The independent action against some other firms would not impede the proceedings already initiated by the State Tax Authorities. Any new information which the respondent No. 2 may have gathered related to fraudulent availment or passing on can always be informed to the authorities, who already conducting the investigation, inquiry and proceedings under Section 6(2) of the Act. 33. In my considered opinion, the word "subject- matter" used in Section 6(2)(b) of the Act would mean, "the nature of proceedings". In the present case, it would thus mean the proceedings initiated prior at any point of time vide Annexure P-1 ....
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....saction. 38. In the 5th GST Council Meeting held on 02.12.2016, the Chairman of the Council emphasized that for the effective implementation of the CGST and SGST, cross-empowerment was essential and should extend across the entire value chain of the taxpayer. The Minister from Karnataka observed that once the State administration had conducted the audit of a taxpayer, there was no justification for the matter to be transferred to the Central administration. The Secretary suggested that the functions such as issuance of show cause notices and passing of adjudication orders ought to be carried out by the same tax administration that had undertaken the audit, scrutiny, or enforcement, thereby maintaining continuity and administrative coherence. The Minister from Tamil Nadu expressed the view that, except in intelligence-based actions where both administrations were to be empowered, dual control should be avoided in other processes such as registration, return filing, scrutiny, audit, appeals, demand, and refund. 39. At the 9th GST Council Meeting held on 16.01.2017, the Chairman of the Central Board of Excise & Customs stated that the States had agreed that both the Central and Stat....
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....re any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax; (b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter. (3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act." 42. Section 6 of the CGST Act and the identical pari-materia provision in the respective State and Union Territories statutes, is a nuanced provision that enshrines both the concept as-well as the contours of "single interface" system and "cross-empowerment". It....
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....ter decision that both the Central and State tax administrations shall have power to take intelligence-based enforcement action in respect of the entire value chain is reflected in the Circular dated 05.10.2018, as reproduced above, and Clarification F. No. CBEC-20/10/07/2019-GST dated 22.06.2020 by the Central Board of Indirect Taxes, GST Policy Wing, which reads thus: "To The Principal Director General, Directorate General of GST Intelligence, 2nd Floor. Wing- VI, West Block- VIII R.K. Puram, New Delhi- 110066 Sir, Subject: Reference form DGGI on Cross empowerment under GST. reg. I am directed to refer to DGGI letter F.No.574/CE/66/2020/Inv./15308 dated 26.05.2020 on the issues related to cross empowerment of officers in terms of provisions of section 6 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as "the CGST Act"). 2. Issue raised in the reference is whether intelligence based enforcement actions initiated by the Central Tax officers against those taxpayers which are assigned to the State Tax administration gets covered under section 6(1) of the CGST Act and the corresponding provisions of the SGST/UTGST Acts or whether a specific notif....
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....ers given to the officers by the section. In the absence or any such conditions, the power of Cross- empowerment under section 6(1) of the CGST Act is absolute and not conditional. Yours faithfully, (Sumit Bhatia) Deputy Commissioner (GST)" 46. The GST regime operates on the principle of self-assessment, as enshrined in Section 59 of the CGST Act, hence, all provisions are to be read in consonance, and not in derogation of Section 59. The provision reads thus: "59. Self-assessment.-Every registered person shall self-assess the taxes payable under this Act and furnish a return for each tax period as specified under section 39." 47. The concept of "cross-empowerment" has been retained within the GST framework in order to maintain a robust enforcement mechanism and prevent any scope of evasion of taxes. For this purpose, both the Central and State tax administrations have been armed with the power to initiate intelligence-based enforcement action i.e., an action that is predicated on information of tax evasion emanating from the value chain or chain of transactions rather than from any administrative scrutiny by way of audit of accounts or returns. 48. Such gathering of intel....
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....se (a) of sub-section (2) of Section 6 of the Act expressly provides that if a proper officer issues an order under Act, he shall also issue an order under the SGST Act or the UGST Act as authorised by the said enactments under intimation of the jurisdictional officer. 26. In conformity with the scheme of statutes in respect of Goods and Services Tax Act (the Act, the SGST Act and the UGST Act) officers under any of the said statutes can be authorised as proper officers for the purposes of proceeding under the other GST statutes as well. Section 6(1) of the Act empowers the officers appointed under the SGST Act and the UGST Act to act as proper officers for the purposes of the Act. Section 6 of the SGST Act and the UGST Act mirrors Section 6 of the Act. Consequently, the officers under the said enactments are also authorised as proper officers under the Act. 27. In conformity with the scheme of cross- empowering officers under the said enactments, clause (a) of Section 6(2) of the Act also empowers a proper officer to issue orders under the SGST Act and the said Act. Similarly, officers under the SGST Act and the UGST Act are also empowered to issue orders under the Act. The on....
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....er under this Act on the same subject matter." 55. Section 6(2)(b) of the CGST Act precludes a proper officer under the CGST Act to initiate any proceedings on a subject matter if a proper officer under the SGST or the UGST Act has initiated any proceedings on the same subject matter. The CGST Act does not define the term "proceedings". In context with this provision, the Chairman of the 11th GST Council Meeting, held on 04.03.2017, while discussing the approval of the Draft Central Goods and Services Tax Law, opined that that there should be an express or implied bar to prevent a taxpayer from being subjected to proceedings before multiple officers for the same dispute. 56. Section 70 of the CGST Act empowers a proper officer to summon any person whose presence is considered necessary for giving evidence or producing documents or any other relevant material in an inquiry. The issuance of summons is one of the instruments employed by the Department to obtain information, documents, or statements in cases involving suspected tax evasion. Such summons may be issued to the person under investigation or to a person considered a witness in investigation against another person. 57. A ....
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....ow cause notice dated 18.11.2024 by the respondent no. 2 under Section 73 of the CGST Act, thereby initiating proceedings. The petitioner has impugned the summons dated 16.01.2025 and 23.01.2025 respectively issued by the respondent no. 1 for production of documents. At the summons stage, it cannot be predicated with certainty that the subject matter of the proceedings will be identical; the mere presence of an overlapping aspect under investigation does not ipso facto render the subject matter "same". 62. The High Court correctly held that the term "any proceedings" does not encompass summons issued pursuant to a search or investigation, as at the stage of issuance of summons the Department is merely engaged in gathering information. We are in agreement with the finding that a case of search is clearly distinct and separate from proceedings initiated only after issuance of a show cause notice. 63. We may now proceed to elaborate on our understanding of "initiation of any proceedings" within the meaning of Section 6(2)(b) of the CGST Act. P. Ramanatha Aiyar's, 6th Edition, page 4415-4420, defines "proceedings" as under:- "It is not a technical expression with defined meaning at....
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....btained through summons and relied upon for issuing the show cause notice must be appended and disclosed to the assessee. In essence, a show cause notice enumerates the charges levelled against the notice. 68. An assessee may be held liable to pay tax along with interest pursuant to an audit, scrutiny, or investigation. This liability can be discharged either through self-assessment or by way of assessment conducted by the Department. The Act contemplates the issuance of a show cause notice under Sections 73, 74, and 76 respectively, wherein the assessee is afforded one or more opportunities to pay the demanded tax amount. Upon such payment, all proceedings in respect of the said notice stand concluded. 69. Once a show cause notice is issued under a specific provision and the reply submitted in response is duly considered by the adjudicating authority, the liability is then determined through the issuance of an order of adjudication, commonly referred to as an 'Order-in-Original'. 70. The above flowchart, prepared and published by the Comptroller and Auditor General of India in Report No. 1 of 2021 (Indirect Taxes - Goods and Services Tax, Central Excise and Service Tax), illust....
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....d to be initiated in the absence of certainty, nor can they culminate without adherence to the principles of natural justice. A show cause notice marks the commencement of a process that culminates in an order passed by the adjudicating authority. The legislative intent to prevent the subjugation of a taxpayer to parallel proceedings and to avoid contradictory orders can only be realized only when the Department is clear about the subject matter it seeks to pursue, a certainty that arises only at the stage of issuance of the show cause notice. 74. In the facts of the present case, the mere issuance of summons does not imply that the Department has decided to proceed against the taxpayer for recovery of liability. Therefore, issuance of summons, by no stretch, can be considered as the initiation of proceedings, since at that stage, the Department still retains the discretion not to initiate any proceedings. A mere contemplation or possibility of initiating action cannot be equated with "proceedings", as doing so would undermine the framework of cross-empowerment under the Act. Even when a discovery is made during the search proceedings under Section 67 of the CGST Act, the Departme....
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....officers of State tax authorities against a taxpayer administratively assigned to the Central tax authority. 6. It is also informed that GSTN is already making changes in the IT system in this regard." 76. The said Circular is premised on the administrative division of the taxpayer base, as explained in Circular No. 01/2017 dated 20.09.2017. We would like to underscore that this division of the taxpayer base does not operate as a bar to the initiation of enforcement action by Central Tax officers against a taxpayer assigned to the State Tax authority, and vice versa. 77. Enforcement action undertaken by any Department is ordinarily based on intelligence as elucidated by us in paragraph 48 of this judgment, and the authority initiating such action is empowered to carry the matter to its logical conclusion. The term "logical conclusion" does not invariably refer to an order of assessment in every case. Rather, it denotes the decision arrived at by the officers of the Department, having regard to the peculiar facts and circumstances of each case. II. Whether "subject matter" within the meaning of Section 6(2)(b) of the CGST Act includes all matters dealt with in summons under the....
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....tion 6(2)(b) is qualified by the words "subject- matter" which indicates an adjudication process/proceedings on the same cause of action and for the same dispute which may be proceedings relating to assessment, audit, demands and recovery, and offences and penalties, etc.[...]" (Emphasis supplied) 81. In Satyam Castings Pvt. Ltd. v. Deputy Director, DGGI, Bhubaneshwar, reported in 2024 SCC OnLine Ori 1624, the High Court of Orissa also equated "subject matter" with 'cause of action'. The relevant extracts are reproduced hereinbelow: "21. The relevant fact to be borne in mind is the subject-matter of the proceeding. If the subject-matter of the proceeding is entirely different, there is no bar to the maintainability of the proceeding. What is barred is the initiation of the proceeding on the same subject-matter by the proper officer. The words "subject-matter" can be equated with words "cause of action". The reason behind barring the initiation of proceeding on the same subject-matter by the proper officer under the State Goods and Services tax Act or the Union Territory Goods and Services tax Act seems to be that the possibility of the final decision in the two proceedings bei....
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....pportunity to rebut the same. Another requirement, according to us, is the nature of action which is proposed to be taken for such a breach. That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/breaches complained of are not satisfactorily explained. When it comes to blacklisting, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action. (Emphasis supplied) 84. Primacy is given to the cogency of a show cause notice. The subject matter of the proceedings lies in the contents of the notice. Hence, it ought to be exhaustive, so much so that it is capable of presenting the case of the Revenue in a nutshell. In The Commissioner of Central Excise, Bhubaneswar-I v. Champdany Industries Limited, reported in (2009) 9 SCC 466, while deciding upon the classification of jute carpets, this Court noted that in the failure of mentioning the application of certain tests which the Revenue relied upon in the proceedings before the Court, the Revenue cannot rely on such tests at a later stage. A show cause notice must lay down the foundation of the cas....
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....e slightest overlap in the tax liability or obligation. 87. In other words, under Section 6(2)(b), the "subject matter" is intrinsically tied to the determination of the specific violation under scrutiny or the liability alleged to be unpaid. The statutory bar is triggered only when the two proceedings against the same taxpayer are, in substance, directed towards the very same or overlapping deficiency in tax discharge or the identical contravention alleged. Where the proceedings concern distinct infractions, each Department is entitled to proceed within its respective statutory remit without infringing the prohibition. Where the proceedings concern distinct infractions, each Department is entitled to proceed within its respective statutory remit without infringing the prohibition. 88. In order to bolster such embodiments of Section 6(2)(b) at large, we lay down a twofold test, discernible from our discussion above, to determine whether a subject matter is "same": first, the subject matter will be considered the same if an authority has already proceeded on an identical liability of tax or alleged offence by the assessee on the same facts; and secondly, if the demand or relief so....
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....the UTGST Act, to render a comprehensive order, thereby avoiding multiplicity of proceedings. Such a construction is also in consonance with the well-recognized principle of comity between jurisdictions, which mandates that coordinate authorities must act with mutual respect and due regard for each other's domain, so as to preclude the possibility of conflicting determinations on the same issue. 94. To give effect to the above intent, Section 6(2)(a) is couched in terms that are both enabling and mandatory. It confers upon, and simultaneously obliges, the proper officer to issue a corresponding order under the SGST Act or the UTGST Act in cases where an order is being issued under the CGST Act. The expression 'order', qualified by the terms "under this Act", occurring in the said provision admits of a broad construction, so as to include every form of order which a proper officer is competent to issue by virtue of the authority vested in them under the statute. Such an interpretation is necessary to ensure that the statutory mandate achieves its intended purpose of avoiding multiplicity of proceedings and securing uniformity of adjudication across the parallel enactments. 95. Ina....
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.... the same would not constitute a "same subject matter" even if the tax liability, deficiency, or obligation is same or similar, and the bar under Section 6(2)(b) would not be attracted. x. The twofold test for determining whether a subject matter is "same" entails, first, determining if an authority has already proceeded on an identical liability of tax or alleged offence by the assessee on the same facts, and secondly, if the demand or relief sought is identical. 97. We issue the following guidelines to be followed in cases where, after the commencement of an inquiry or investigation by one authority, another inquiry or investigation on the same subject matter is initiated by a different authority. a. Where a summons or a show cause notice is issued by either the Central or the State tax authority to an assessee, the assessee is, in the first instance, obliged to comply by appearing and furnishing the requisite response, as the case may be. We say, so because, mere issuance of a summons does not enable either the issuing authority or the recipient to ascertain that proceedings have been initiated. b. Where an assessee becomes aware that the matter being inquired into or inv....