2023 (2) TMI 92 - HC - GST

Validity of SCN - SCN challenged on the ground that the same has been issued in violation of Section 6(2)(b) of the TNGST Act, 2017 - HELD THAT - This Court is of the considered view that necessarily the petitioner will have to submit a detailed reply to the impugned show cause notice to the respondents to enable the respondents to consider the petitioner's grievance that no fresh proceedings can be initiated against them under the TNGST Act, 2017, in view of the fact that the Central Authority has already initiated action against the petitioner for the very same subject matter under the show cause notices dated 29.07.2022 and 31.12.2022. When the respondents have undertaken before this Court that they shall consider the grievance of the petitioner as raised in this Writ Petition, the question of entertaining this Writ Petition at this stage and granting relief to the petitioner will not arise. The only limited relief that can be granted to the petitioner is to permit them to file a detailed reply to the impugned show cause notice, stating all their objections that have been raised in this Writ Petition including the objection with regard to Section 6(2)(b) of the TNGST Act, 2017 and on receipt of the said reply, a direction can be issued to the respondents to consider the said reply on merits and in accordance with law within a time frame to be fixed by this Court. This Writ Petition is disposed of by directing the petitioner to submit a reply to the impugned show cause notice within a period of three weeks from the date of receipt of a copy of this order and on receipt of the said reply, the first respondent shall pass final orders on merits and in accordance with law.

Summary

Issues:
Challenge to show cause notice under TNGST Act, 2017 based on violation of Section 6(2)(b) - Similarity of defects in show cause notices issued by Central Authority and State Authority - Consideration of objections raised by petitioner - Relief sought by petitioner.

Analysis:
The petitioner challenged an impugned show cause notice issued under the Tamil Nadu Goods and Service Tax Act, 2017, citing a violation of Section 6(2)(b) of the Act. The petitioner contended that a similar notice was issued by the Central Authority under the CGST Act, 2017, involving identical defects. As per Section 6(2)(b) of the TNGST Act, when proceedings are initiated by the proper officer under the CGST Act on the same subject matter, no fresh proceedings can be initiated under the TNGST Act. The petitioner argued that the defects highlighted in both notices were the same, thus precluding the initiation of new proceedings under the TNGST Act.

During the hearing, the Government Advocate for respondent No.1 presented written instructions indicating that if the petitioner submits a detailed reply to the show cause notice, defects similar to those in the notice issued by the Central Authority would be omitted. The petitioner maintained that the defects in both notices were identical, emphasizing the prohibition on initiating fresh proceedings under the TNGST Act when the Central Authority has already taken action on the same subject matter.

The Court examined Section 6(2)(b) of the TNGST Act, which prohibits the initiation of proceedings by the State Authority if the Central Authority has already initiated proceedings on the same subject matter. The respondents assured the Court that they would consider the objections raised by the petitioner once a detailed reply was submitted. The Court emphasized the necessity for the petitioner to provide a comprehensive response to the show cause notice to enable the respondents to evaluate the objections raised, including those related to Section 6(2)(b) of the TNGST Act.

Ultimately, the Court disposed of the Writ Petition by directing the petitioner to submit a detailed reply to the show cause notice within three weeks. Upon receipt of the reply, the first respondent was instructed to pass final orders within four weeks, considering the objections raised by the petitioner. The Court refrained from granting any costs and closed the connected Writ Miscellaneous Petition. The judgment focused on ensuring the petitioner's right to respond effectively to the show cause notice and the subsequent consideration of objections by the respondents within a specified timeframe.