2024 (10) TMI 1305 - HC - GST

Initiation of parallel proceedings despite the issuance of a comprehensive notice by the Directorate General of GST Intelligence - HELD THAT - The respondents are restrained from taking further steps pursuant to the impugned SCN dated 24 May 2024 pertaining to the tax period of April 2019 to March 2020. Petition disposed off.

Summary

Issues:
1. Challenge to Show Cause Notice governed by previous decision.
2. Adjudication of demand by multiple authorities.
3. Restraint on further steps by respondents pending DGGI's order.

Analysis:

1. The High Court noted that the challenge to the Show Cause Notice (SCN) in the present writ petition would be governed by a previous decision in a similar case. The court referred to the decision in DLF Home Developers Limited vs. Sales Tax Officer, emphasizing the issue of parallel proceedings initiated by different authorities despite a comprehensive notice issued by the Directorate General of GST Intelligence (DGGI).

2. The court highlighted that the petitioner objected to the demand for reversing Input Tax Credit (ITC) on non-business transactions and exempt supplies, arguing that two authorities cannot simultaneously proceed on the same issue. The court found merit in this contention and ruled that respondent no.1 cannot adjudicate a demand that is also under consideration in other proceedings by the DGGI. Consequently, the court directed that the impugned demand be set aside to be adjudicated by the DGGI as per their show cause notice.

3. In light of the above, the court restrained the respondents from taking further steps based on the impugned Show Cause Notice dated 24 May 2024 for the tax period of April 2019 to March 2020. This restraint was subject to the final order to be passed by the DGGI following their independent Show Cause Notice dated 02 February 2024. The writ petition was disposed of with the respondents having the liberty to proceed based on the outcome of the DGGI's proceedings.