2024 (2) TMI 939 - HC - GST

Issuance of summons u/s 70 of the Central Goods and Excise Taxation Act., 2017 - duplication of proceedings in so far as dealing of the petitioner with M/S R.J. Trading Company is concerned - HELD THAT - Based on the documents placed on record, a prima facie case exists in favour of the petitioner. Balance of convenience also lies in favour of the petitioner. Grave irreparable loss, which cannot be compensated in terms of money shall be occasioned to the petitioner, if in case the respondents are not restrained from giving effect to Annexure P-10, i.e. order dated 20.05.2023. The impugned order dated 20.05.2023, is stayed till further order. The application stands disposed of.

Summary

Issues involved:
The issues involved in the judgment are related to the imposition of tax liability under Section 74 of the HPGST/CGST Act, 2017 on the petitioner for supplies received from M/S R.J. Trading, and the alleged duplication of proceedings by the authorities.

Imposition of Tax Liability:
The respondent No. 2 had issued summons under Section 70 of the HPGST/CGST Act, 2017 for the period from 01.01.2021 to 30.06.2021 regarding supplies received by the petitioner from M/S R.J. Trading. A show cause notice under Section 74(1) was issued based on the petitioner's reply, followed by an order imposing tax liability under Section 74(9) along with interest and penalty. The petitioner raised concerns about duplication of proceedings as similar proceedings had already been concluded with the Central authorities.

Duplication of Proceedings:
The petitioner highlighted that summons were previously issued by the Central Authorities under the Central Goods and Excise Taxation Act, 2017 for the period from 01.07.2017 to 30.06.2021 regarding dealings with M/S R.J. Trading. The petitioner had deposited the GST liability amount with the Central authorities, resulting in the closure of those proceedings. The petitioner argued that being pursued for the same liability by both Central and State authorities amounted to vexation and double jeopardy.

Court's Decision:
Considering the submissions and documents on record, the court found a prima facie case in favor of the petitioner. The court also noted that the balance of convenience favored the petitioner, and there was a risk of grave irreparable loss if the impugned order dated 20.05.2023 was enforced. Therefore, the court stayed the impugned order pending further proceedings, acknowledging the potential harm to the petitioner if the respondents were not restrained from implementing the order.