2022 (3) TMI 43 - HC - GST

Maintainability of two parallel proceedings under CGST Act in two places over the self-same incident and cause of action against the petitioner - HELD THAT - It is submitted by petitioners that two parallel proceedings are not prima facie maintainable against the petitioner. Having heard the learned Senior Counsel for the petitioners, this Court is of the view that the petitioners have been able to make out an arguable case and accordingly, the instant petition is admitted for hearing - Since the respondents have already been served, they are at liberty to file affidavit-inopposition within three weeks from the date and serve a copy of the same to the learned Advocate for the petitioner. Considering the fact that over the self-same incident of alleged evasion of tax two proceedings are prima facie not maintainable and in view of sudden surge in Covid cases, the proceedings at Kolkata initiated against the petitioners be stayed till 9th February, 2022 or until further order, whichever is earlier.

Summary

Issues:
1. Maintainability of two parallel proceedings under CGST Act in two different places over the same incident and cause of action against the petitioner.

Analysis:
The judgment delivered by the High Court of Calcutta revolves around the issue of whether two parallel proceedings under the Central Goods and Services Tax (CGST) Act can be maintained in two different locations concerning the same incident and cause of action against the petitioners. The petitioners, a Private Limited Company and its Director, were involved in the business of Whole Leaf Tobacco in Siliguri. Officers of the Directorate General of GST Intelligence, Siliguri Zonal Unit, conducted a search at the company's premises and seized certain books of accounts under two seizure lists. Subsequently, summons were served to the petitioners at the location in Siliguri under Section 70 of the CGST Act. However, the petitioners were also summoned to appear at the Office of the Directorate General of Goods and Services Tax in Kolkata regarding the same incident, raising jurisdictional concerns.

The petitioners contended that two parallel proceedings in different locations were not prima facie maintainable against them. The Court, after examining the documents attached to the writ petition and hearing the arguments of the petitioners' counsel, found that an arguable case had been presented. Therefore, the Court admitted the petition for further hearing. The respondents were directed to file an affidavit-in-opposition within three weeks and serve a copy to the petitioner's advocate. The petitioners were given the opportunity to file an affidavit-in-reply within seven days thereafter.

Considering the duplicity of proceedings over the same alleged tax evasion incident and the prevailing circumstances of a surge in Covid cases, the Court ordered a stay on the proceedings initiated against the petitioners in Kolkata until 9th February 2022 or until further notice. This decision aimed to prevent unnecessary hardship to the petitioners and ensure a fair legal process. The judgment highlighted the importance of avoiding multiple proceedings on the same matter and the need for clarity in jurisdictional issues under the CGST Act to uphold the principles of natural justice and procedural fairness.