TaxTMI 
TaxTMI 
2026 (10) TMI 242
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....nafter referred to as "DGST Act"]. 2. The issue which arises for consideration in the present Petition is whether this Court, in exercise of its jurisdiction under Article 226 of the Constitution of India, ought to interfere with the adjudication proceedings culminating in the Order-in-Original passed under Section 74 of the Central Goods and Services Tax Act, 2017 [hereinafter referred to as "CGST Act"], on the grounds that the proceedings were allegedly initiated in breach of Section 6(2)(b) of the CGST Act, in disregard of earlier proceedings undertaken by the State Goods and Services Tax authorities, without affording an effective opportunity of hearing, and by allegedly travelling beyond the allegations contained in the Show Cause Notice. FACTUAL MATRIX: 3. In order to appreciate the controversy involved in the present Petition, the relevant facts, in brief, are required to be noticed. 4. The Petitioner is a proprietorship concern engaged in the business of retail and wholesale trading of machines, screws, scaffolding, shuttering and propping equipment. The proceedings in question emanate from an investigation initially undertaken in respect of M/s Pramod Traders/B....
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....ion of CGST Delhi North, were stated to have availed ITC amounting to Rs. 10,30,79,845/-, while the remaining 390 beneficiary entities, falling within the jurisdiction of other CGST/SGST Commissionerates, were stated to have availed ITC amounting to Rs. 1,77,95,772/-. 12. The case of the Department, as reflected in the Impugned Order, is that the aforesaid transactions were undertaken without any genuine supply or receipt of goods or services and that the recipient entities had availed and utilised inadmissible ITC on the strength of invoices without actual receipt of the corresponding goods. 13. During the investigation, summonses were issued to the recipient entities falling within the jurisdiction of CGST Delhi North. The Impugned Order records that some of the recipient entities deposited amounts towards reversal of ITC, interest and penalty. Insofar as the Petitioner is concerned, the Table forming part of the Impugned Show Cause Notice records the alleged ITC liability of M/s A.G. Enterprises at Rs. 47,93,104/-, along with applicable interest and penalty. The record further reflects a deposit of Rs. 5,00,000/- by the Petitioner through DRC-03 dated 20.10.2022. 14. A ....
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....rities for financial year 2020-21, in which a notice dated 22.11.2024 was issued in respect of, inter alia, M/s ASA Nand Nathu Ram. The Petitioner states that the said proceedings subsequently culminated in an order dated 27.02.2025. 20. In the meantime, the Central GST proceedings proceeded on the basis of the Demand-cum-Show Cause Notice dated 06.06.2024, the summary of which was uploaded on the GST portal on 02.08.2024. The Petitioner submitted a response to the pre-notice intimation/DRC-01A on 28.05.2024, raising, inter alia, an objection regarding the earlier proceedings undertaken by the State GST authorities and asserting that the conditions for availment of ITC under Section 16 had been fulfilled. 21. The Petitioner also raised objections regarding the nature of the evidence relied upon by the Department and sought an opportunity to cross-examine the persons whose statements were relied upon. The Petitioner also referred to the proceedings undertaken against other taxpayers and requested that the proposed demand not be confirmed without considering the material placed on record. 22. Thereafter, the adjudication proceedings culminated in the Impugned Order-in-Origin....
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....nitiated proceedings in respect of the same ITC allegedly availed from M/s ASA Nand Nathu Ram and, therefore, the Central GST authorities could not have initiated another proceeding concerning the same subject matter. 27.2. It was further submitted that the proceedings before the State GST authorities had, in respect of certain financial years, already culminated in orders. Particular emphasis is placed upon the order dated 13.12.2023 for financial year 2017-18, whereby the allegation concerning the ITC availed from M/s ASA Nand Nathu Ram is stated to have been dropped. Reliance is also placed upon the subsequent orders passed by the State GST authorities in respect of financial years 2018-19 and 2019-20. 27.3. It was next submitted that the Impugned Order could not have confirmed the demand on a ground different from that contained in the Show Cause Notice. According to the Petitioner, the Show Cause Notice proceeded on the allegation of non-receipt of goods and alleged contravention of Section 16(2)(b), whereas the order is stated to have proceeded on the premise that the supplier had not discharged the tax liability to the Government, thereby attracting Section 16(2)(c). ....
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....n of an objection as one of "jurisdiction" or "natural justice" does not, by itself, require this Court to exercise its writ jurisdiction in every case. The Court is required to examine the substance of the objection and the nature of the adjudication which is under challenge. 32. In the present case, the challenge under Section 6(2)(b) proceeds on the premise that the proceedings initiated by the State GST authorities and the proceedings initiated by the Central GST authorities necessarily concern the same subject matter merely because both proceedings involve ITC allegedly availed from M/s ASA Nand Nathu Ram. 33. The expression "same subject matter" occurring in Section 6(2)(b) is of central significance. The statutory provision does not prohibit every subsequent proceeding merely because the same assessee has earlier been subjected to proceedings by another GST authority. The bar operates where the subsequent proceedings are in respect of the same subject matter. 34. The question whether two proceedings concern the same subject matter cannot, therefore, be determined merely by identifying a common supplier or by observing that the proceedings relate to ITC. The relevant....
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....024 whereby the demand relating to M/s ASA Nand Nathu Ram was stated to have been confirmed. In respect of financial year 2019-20, the State proceedings were initiated by notice dated 29.05.2024 and, according to the Petitioner, culminated in an order dated 29.08.2024. 40. The aforesaid chronology, at the very least, demonstrates that the question whether the liability adjudicated upon by the Central authorities was precisely the same liability which had already been subjected to proceedings by the State authorities involves an examination of the respective Show Cause Notices, the tax periods, the invoices and the precise ITC amounts involved therein. 41. Such an exercise is essentially factual in nature. It is also relevant that the Central proceedings were initiated under Section 74 of the CGST Act on the allegation that ITC had been availed and utilised on the strength of invoices without actual receipt of goods or services and that such availment was accompanied by fraud, wilful misstatement or suppression of facts. 42. The State proceedings, as placed before this Court, were initiated under Section 73 of the CGST Act. The fact that a proceeding is under Section 73 whi....
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....orded in paragraph 12 of the order. 49. Likewise, the invocation of Section 74(1) is based upon the adjudicating authority's conclusion that the alleged availment and utilisation of ITC without actual receipt of goods was accompanied by fraud, wilful misstatement or suppression of facts. Thus, the challenge that the entire demand has been confirmed on a wholly new and unrelated factual foundation is not borne out, at least on the face of the Impugned Order. 50. Whether the aforesaid findings are factually and legally sustainable, whether the material relied upon establishes actual non-receipt of goods, and whether the ingredients necessary for invoking Section 74 are satisfied are matters which can appropriately be considered in the statutory appellate proceedings. 51. The next contention concerns the alleged denial of personal hearing. 52. Section 75(4) of the CGST Act contemplates grant of an opportunity of hearing where a request is received in writing from the person chargeable with tax or where an adverse decision is contemplated against such person. 53. In the present case, the Impugned Order specifically contains a section dealing with the record of person....
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....ication order, particularly where the order has been passed after issuance of a Show Cause Notice and the adjudicating authority has recorded its reasons. 61. The Petitioner has also questioned the clubbing of different financial years in the impugned proceedings and contends that the same affects limitation. 62. The objection concerning limitation is necessarily dependent upon the identification of the particular tax periods and the precise transactions forming the subject matter of the demand. The Impugned Order records the period covered by the proceedings and the basis on which the Department invoked Section 74. Whether the statutory requirements for invoking the extended period contemplated under Section 74 were satisfied in respect of the particular liability of the Petitioner is a matter which can be examined by the appellate authority on the basis of the complete Show Cause Notice and the adjudication record. 63. The mere fact that the proceedings concern more than one financial year does not, by itself, render the proceedings void. The material question would be whether the demand pertaining to each relevant period has been separately identifiable, whether the sta....
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....er Central initiation. 70. Likewise, the State order stated to have been passed on 27.02.2025 in respect of financial year 2020-21 was passed after the Central Order-in-Original dated 12.02.2025. Such subsequent adjudication cannot retrospectively render the Central proceedings without jurisdiction. 71. This Court is conscious of the fact that the Petitioner's principal grievance is founded upon the statutory bar contained in Section 6(2)(b). A jurisdictional objection of this nature is undoubtedly capable of being examined in writ jurisdiction in an appropriate case. However, the present case involves determination of the precise identity of the tax liability forming the subject matter of the respective State and Central proceedings. That determination requires examination of the respective notices, replies, orders and underlying transaction-wise material. 72. The existence of an efficacious statutory appellate remedy assumes significance in such circumstances. The Petitioner has not demonstrated, on the material placed before this Court, a case where the Central proceedings are ex facie wholly without jurisdiction or where the Impugned Order is liable to be set aside sol....
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.... notwithstanding the statutory remedy. In the facts of the present case, the same has not been established. 79. There is yet another aspect which merits notice. The Petitioner seeks, in substance, adjudication by this Court of the correctness of the demand of Rs. 47,93,104/-, the entitlement to ITC, the factual question of receipt of goods, the evidentiary value of statements and investigation material, the applicability of Section 74, the computation of interest and the consequential penalty. 80. Such an exercise would require this Court to enter into disputed questions arising from the investigation and adjudication record. The statutory appellate mechanism is specifically designed to undertake such examination. There is no justification for this Court to assume the role of the appellate authority in the present proceedings. 81. This Court is, therefore, of the view that the Petitioner has not made out a case warranting interference with the Impugned Order-in-Original in exercise of the extraordinary jurisdiction under Article 226 of the Constitution of India. 82. The challenge to the Demand-cum-Show Cause Notice also cannot survive independently once the adjudication....