2021 (2) TMI 699 - HC - GST

Validity of summon order - Competent officer / authority u/s 6(2)(b) of CGST Act 2017 - Jurisdiction - seeking restraint on Respondent from carrying out further investigation against him - HELD THAT - The investigation conducted by respondent No.2 is limited to information provided by DGGI, Lucknow, CGST Agra and DGGI Ghaziabad about fake availment of ITC by M/s R.K.M. Steels Industries from bogus firms namely M/s Shri Radhe Traders, Kanpur; M/s M.G. Enterprises, Agra; M/s T.C. Company, Agra and M/s Dharam Enterprises, Agra. The matter under investigation before DGGI Bhopal is limited to purchases and availment of ITC by M/s R.K.M. Steel Industries from M/s Diamond Enterprises. Accordingly, the petitioner has been summoned under Section 70 of CGST Act, 2017 by DGGI, Bhopal. The aforesaid position, makes it quite clear that different Officers appointed under Sections 3 6 of CGST Act, 2017 are independently investigating altogether different matters, in accordance with law, without any overlapping. Moreover, the alleged contraventions are prima facie cognizable and punitive in nature under CGST Act, 2017. The investigations being conducted by competent Officers against the petitioner are not hit by provisions of Section 6(2)(b) of CGST Act, 2017 - there are no reason to interfere with the aforesaid investigations undertaken by the competent authorities against the petitioner under CGST Act, 2017 - petition dismissed.

Summary

Issues:
Petition seeking quashing of summons and restraining further investigation by Additional Director General, Directorate General of GST Intelligence. Allegations of misuse of Input Tax Credit (ITC) by petitioner and sister concern. Overlapping investigations by different authorities under CGST Act, 2017.

Analysis:
The petitioner filed a petition to quash summons and halt further investigation by Additional Director General, alleging misuse of ITC. The petitioner, a proprietor of a trading business, was under investigation by different authorities for alleged ITC misuse. The Directorate General of GST Intelligence in Ludhiana initiated a separate investigation, which overlapped with the initial investigation by the Commissioner, Central Goods and Services Tax, Kanpur. The petitioner argued that the subsequent investigations were unwarranted and violated CGST Act, 2017.

In response, the Respondent No.1 contested the petitioner's claims, stating that the investigations by different authorities were on distinct matters. The Respondent assured that the ongoing investigation would not duplicate matters already under scrutiny by other government authorities. The Respondent urged the dismissal of the petition as misconceived.

The court considered the arguments and examined Section 6(2)(b) of CGST Act, 2017, which prohibits initiating proceedings on the same subject matter once a proper officer has started proceedings. Respondent No.1 clarified that the investigations focused on different aspects: fraudulent ITC passing and fake availment of ITC by the petitioner's business from various firms. The investigations by different officers were independent and not overlapping. The alleged contraventions were deemed cognizable and punitive under CGST Act, 2017.

Consequently, the court held that the investigations by competent officers against the petitioner did not contravene Section 6(2)(b) of CGST Act, 2017. Therefore, the court dismissed the writ petition for lacking merit. The judgment also disposed of any pending applications related to the case.