TaxTMI 
TaxTMI 
2026 (9) TMI 1363
X X X X Extracts X X X X
X X X X Extracts X X X X
....Original as being dated 03.02.2025, the Order-in-Original placed on record bears the date 31.01.2025. The present judgment shall accordingly proceed on the basis that the impugned Order-in-Original was passed on 31.01.2025. 3. The principal grievance of the Petitioner is that the proceedings initiated by the DGGI are without jurisdiction in view of Section 6(2)(b) of the CGST Act, since the State GST authorities had already initiated proceedings in respect of alleged wrongful availment of Input Tax Credit ['ITC']. The Petitioner further assails the issuance of a consolidated Show Cause Notice covering multiple financial years. FACTUAL MATRIX 4. In order to appreciate the controversy involved in the present Petition, the relevant facts, in brief, are required to be noticed. 5. The Petitioner is stated to be engaged in the business of export of readymade garments and has been registered under the GST regime with effect from 01.07.2017. 6. The record placed before this Court shows that an intelligence was developed jointly by the DGGI and the Directorate General of Revenue Intelligence ['DRI'] concerning alleged fraudulent availment of ITC on invoices issued by non-exis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....-in-Original No. 73/SPP/ADC/CGST/DSC/2024-25 pursuant to the Show Cause Notice dated 29.07.2024. By the said order, the demand of Rs. 7,81,78,980/- was confirmed under Section 74(9) of the CGST Act read with the relevant provisions of the DGST Act and the IGST Act, along with applicable interest. Penalties were also imposed, including a penalty of Rs. 7,81,78,980/- in respect of the alleged fraudulent availment and utilisation of ITC and a penalty of Rs. 6,51,63,242/- in respect of the alleged fraudulent availment of IGST refund. 14. The Petitioner thereafter amended the present Writ Petition so as to assail the aforesaid Order-in-Original as well. CONTENTIONS OF THE PARTIES 15. Contentions of the Petitioner 15.1. Learned counsel for the Petitioner submitted that the proceedings initiated by the DGGI are without jurisdiction in view of Section 6(2)(b) of the CGST Act. According to the Petitioner, the State GST authorities had already initiated proceedings concerning alleged wrongful availment of ITC for the period July 2017 to March 2019 and two such proceedings had culminated in orders confirming the demand. 15.2. It was further submitted that the proceedings initia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ew of the statutory appellate remedy. It was submitted that the said decision applies with greater force once the proceedings have culminated in an Order-in-Original. 16.3. On merits, it was submitted that the proceedings relied upon by the Petitioner under Section 73 of the DGST Act and the proceedings initiated by the DGGI under Section 74 of the CGST Act arise in materially different factual and legal settings. According to the Respondents, the State proceedings concerned specific discrepancies and ITC claims, including ITC allegedly availed from cancelled dealers, whereas the DGGI proceedings arose from an independent investigation into alleged fraudulent availment of ITC from 20 non-existent suppliers and the consequential utilisation of such ITC towards IGST liability on exports and availment of IGST refunds. 16.4. It was submitted that the mere fact that both proceedings concern ITC, or that there may be some factual or transactional overlap, does not establish identity of the "subject matter" for the purposes of Section 6(2)(b) of the CGST Act. 16.5. Reliance was placed upon the judgment of the Supreme Court in M/s Armour Security (India) Ltd. v. Commissioner, CGST....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the proceedings, including the nature of the ITC allegedly availed, the suppliers involved, the allegations of fraud, the material relied upon by the adjudicating authority and the alleged overlap between the State and Central proceedings. 22. These are matters which can appropriately be examined in the statutory appellate proceedings. The appellate authority is competent to examine the legality and correctness of the adjudication and to consider the material placed before it in accordance with law. 23. The Petitioner has also urged that the requirement of statutory pre-deposit should not compel it to avail the appellate remedy. This contention cannot, by itself, furnish a ground for bypassing the statutory remedy. The same consideration was noticed and dealt with by this Court in PEI Industries (supra). 24. The fact that the present petition was initially filed when the Show Cause Notice was pending also does not justify continuation of the writ proceedings for adjudication of the challenge to the Order-in-Original. The adjudicatory proceedings have since been completed and the Order-in-Original is independently amenable to challenge under Section 107 of the CGST Act. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Section 73 of the DGST Act concerned FY 2018-19 and resulted in an order dated 09.04.2024. 34. The proceedings initiated by the DGGI, on the other hand, arise out of an investigation into alleged fraudulent availment of ITC on the basis of invoices issued by non-existent and fictitious entities and the alleged utilisation of such ITC towards payment of IGST on exports and consequential availment of IGST refunds. The DGGI Show Cause Notice dated 29.07.2024 was issued under Section 74 of the CGST Act and covers the period from FY 2017-18 (July onwards) to FY 2019-20. 35. Thus, although the proceedings may concern ITC and may have some factual or transactional overlap, the material placed before this Court indicates a distinction in the nature of the allegations forming the basis of the respective proceedings. The State proceedings were undertaken under Section 73 in relation to the alleged availment of ineligible ITC, whereas the DGGI proceedings under Section 74 arise from allegations of fraudulent availment and utilisation of ITC based upon invoices issued by fictitious/non-existent entities and consequential utilisation towards exports and IGST refunds. 36. The mere fact ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The questions as to whether the demand pertaining to a particular financial year is within the prescribed period of limitation, whether the ingredients of Section 74 are otherwise satisfied, and whether the quantification of the demand for the respective periods is legally sustainable are matters which can be examined in the statutory proceedings. 45. In the present case, therefore, the Petitioner has not demonstrated any such patent jurisdictional infirmity which would warrant exercise of the extraordinary jurisdiction of this Court after the proceedings have culminated in an Order-in-Original. 46. This Court is also conscious of the fact that the challenge under Section 6(2)(b) involves examination of the precise allegations, liabilities and material forming the basis of the State and Central proceedings. Such examination is more appropriately undertaken by the competent appellate authority in the first instance, particularly when a statutory appeal against the Order-in-Original is available. 47. The present case is consequently distinguishable from a situation where the Court is called upon to examine a pure jurisdictional objection at the threshold, before the statut....