2023 (10) TMI 856 - HC - GST

Jurisdiction - proper officer to issue summons and conduct inquiry - Seeking direction for inquiry to be proceeded with and summons issued by the other, directed to be stayed till the conclusion of the first of such initiated proceedings - inquiry conducted by a 'Proper Officer' as authorized under the Act, who is entitled to proceed under both the State and Central Goods and Services Tax enactments - Revenue seeks for continuation of the proceedings initiated by the various authorities. HELD THAT - In the present case, there are, at present, proceedings initiated by the State Tax Authorities and the Central Tax Authorities and as we noticed, the first of such proceedings was initiated by the Central Tax Authority, having issued summons under Section 70 of the CGST Act. The proceeding issued by the Central Tax Authority is for the assessment years 2017-18 to 2021-22 while the State Tax Authority has initiated audit for the year 2017-18. In the present case, however, the proceedings are with respect to the same assessee and the proceedings initiated under the SGST Act is for a financial year for which proceedings have already been initiated by the 'Proper Officer' under the CGST Act. In such circumstances, going by Section 6, it is only proper that the State Tax Authority does not continue the proceeding and keep it in abeyance till the Central Tax Authority completes the proceedings, first initiated - hence it is directed that the proceedings to be continued as seen from Annexure-2 and 3, which was initiated by a summons under Section 70 of the CGST Act, 2017, as early as on 07.07.2021. The proceedings as initiated against Annexure-1 dated 04.02.2022 by the State Tax Authority, is at the notice stage and with respect to one of the years on which the Central Tax Authority has already initiated proceedings. Annexure-1, hence, shall be kept in abeyance. Petition allowed.

Summary

Issues involved:
The issues involved in the judgment are related to the simultaneous proceedings initiated by different tax authorities for identical assessment years, the authority of the 'Proper Officer' under the Bihar Goods and Services Tax Act, 2017, and the conflict arising when both Central and State Tax Authorities have jurisdiction over the same area or assessee.

Judgment Details:

1. The petitioner, an assessee under the Bihar Goods and Services Tax Act, 2017, raised concerns about notices issued by two Tax Authorities for the same assessment years. The petitioner argued that one inquiry should proceed first, and the other should be stayed until the conclusion of the initial proceedings, citing Section 6 of the BGST Act.

2. The definition of a 'Proper Officer' under the GST enactments was discussed, highlighting the powers and duties of Officers appointed under the Central and State GST Acts. The notification under the CGST Act allows Officers to be appointed as 'Proper Officer' with territorial jurisdiction, leading to instances where both Central and State Tax Authorities have simultaneous jurisdiction over an area.

3. Section 6 of the Central and State GST enactments harmonizes the cross enforcement of Officers under both Acts. It authorizes 'Proper Officers' to issue orders under both Acts and prevents the jurisdictional Officer under one enactment from initiating proceedings on the same subject matter if the other Officer has already begun. This applies to Union Territories as well.

4. A circular issued by the CBEC clarified that Officers of both Central and State Tax Authorities can independently initiate enforcement actions regardless of the administrative assignment of taxpayers, allowing them to complete the entire investigation process without transferring the case to the other authority.

5. The petitioner had been issued notices by both State and Central Tax Authorities for different assessment years. The Court noted that the Central Tax Authority had initiated proceedings first, and therefore, directed the State Tax Authority to keep its proceedings in abeyance until the Central Tax Authority completes its investigation.

6. Referring to a previous decision of the High Court of Delhi, the Court emphasized that when proceedings are initiated by both Central and State Tax Authorities, the investigation can be transferred to a single authority to streamline the process. However, in the present case, since the proceedings were against the same assessee, the State Tax Authority was directed to halt its proceedings until the Central Tax Authority concludes its investigation.

7. The judgment allowed the writ petition, directing the State Tax Authority to suspend its proceedings while the Central Tax Authority completes its investigation, emphasizing compliance with the Central Tax Authority's notices and the transmission of relevant documents from the State to the Central Tax Authority.