2023 (8) TMI 977 - HC - GST

Withdrawal of negative block of the electronic credit ledger of the Petitioner as visible from the extract of credit ledger - Section 25 read with Section 67(2) and Article 19(1)(g) of the Constitution of India - HELD THAT - In the present case, the Delhi State Authority administratively concerned with the petitioner, has clarified that it has not carried out any investigation but had issued orders regarding blocking of the account at the instance of DGGI, Chennai - DGGI, Chennai, has also stated that it has not carried out any investigation in respect of the petitioner company. The disclosed principal place of business of the petitioner is the same as that of some other connected entities, which have been investigated by DGGI, Chennai. Clearly, no advantage can be drawn by the petitioner on that account - petitioner has a separate tax registration. If any of the authorities has found it necessary to investigate the petitioner based on certain information, the said investigation cannot be stopped or interdicted on account of investigation conducted with respect of any other entity. There are no reason to interdict DGGI, Jaipur from conducting the investigation in respect of the petitioner company - petition disposed off.

Summary

Issues:
The issues involved in the judgment are the petitioner challenging the investigations being conducted by the Directorate General of Goods and Service Tax Intelligence (DGGI), Zonal Unit, Jaipur, in relation to the petitioner's affairs.

Judgment Summary:

Investigation Jurisdiction:
The petitioner contended that DGGI, Jaipur, cannot conduct an investigation as the petitioner had already been investigated by the Delhi State Authority for the same period. The petitioner relied on a circular clarifying that both central and state tax authorities can initiate enforcement actions regardless of administrative assignment. However, it was found that no investigation was conducted by any authority regarding the petitioner's company, thus the provisions of the CGST Act were not attracted.

Bank Account Blockage and Registration Cancellation:
The petitioner's bank account and GST registration were blocked by the Delhi State Authority due to an investigation related to dealings with M/s Girdhari Exports. The registration was later restored after the petitioner responded to show cause notices and provided necessary documents. The Input Tax Credit (ITC) was also blocked but subsequently unblocked after a stipulated period.

DGGI Investigations:
DGGI, Chennai, had not investigated the petitioner but was concerned with M/s Balaji Enterprises. The petitioner's bank account was provisionally attached due to its association with Mr. Sandeep Singhal, who was also the Director of the petitioner company. The provisional attachment was made to protect the interest of revenue, and no investigation was conducted into the petitioner's transactions.

Court's Decision:
The Court found that no investigation was conducted by any authority regarding the petitioner's company, and the provisions of the CGST Act were not applicable. The reliance on the circular was deemed misplaced as the authorities empowered to conduct investigations had not done so. The petitioner's connection to other entities investigated by DGGI, Chennai, did not provide any advantage. As the petitioner had a separate tax registration, investigations could proceed based on specific information without interference. Consequently, the petition was disposed of, allowing DGGI, Jaipur, to continue its investigation into the petitioner company.