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2025 (3) TMI 316 - HC - GSTValidity of summons issued by the Central Goods and Services Tax authorities despite proceedings initiated by the State GST authorities - HELD THAT - What the statute seeks to ensure and prohibit are parallel proceedings pertaining to assessment which may be drawn in exercise of powers conferred by Sections 73 and 74 or for that matter any other proceedings akin thereto by two separate sets of authorities. A summons issued pursuant to a search would have to be distinguished from an actual assessment that an authority may choose to undertake. This since such a summons is principally intended to elicit information in respect of material that may have been gathered or comes to light in the course thereof. A search may lead to the discovery of material and information which may not have been even available at the stage of the original assessment proceedings - A search could hypothetically speaking also lead to the recovery of material that never formed part of the original assessment and was unknown to the assessing authority. It could theoretically speaking also have a bearing on the truthfulness of the disclosures made in the course of the original proceedings. Of equal significance are the observations of the High Court in Vivek Narsaria 2024 (1) TMI 809 - JHARKHAND HIGH COURT when it held that Section 6(2)(b) is principally concerned with a chain of a particular event and of proceedings being interrelated . The search which constitutes the basis for the issuance of summons cannot possibly be construed as being related to the earlier assessments or the pending notice proceedings since undisputedly it was undertaken post those events. There are no justification to interdict the summons which have been issued and which as was noticed above are only in aid of proceedings that may be ultimately drawn or initiated - petition dismissed.
ISSUES PRESENTED and CONSIDERED:
1. Whether the summons issued by the Central Goods and Services Tax authorities are valid despite proceedings initiated by the State GST authorities? ISSUE-WISE DETAILED ANALYSIS: Relevant legal framework and precedents: - Section 6(2)(b) of the Central Goods and Services Act, 2017 - Judgment of the Jharkhand High Court in Vivek Narsaria v State of Jharkhand (2024 SCC OnLine Jhar 50) Court's interpretation and reasoning: - The Court interpreted Section 6(2)(b) to prohibit parallel proceedings by different authorities on the same subject matter. - The Court distinguished between a search/investigation and actual assessment proceedings under Sections 73 and 74 of the Act. - The Court held that a summons issued during a search is intended to gather information and does not bar the authorities from taking further action based on the findings. Key evidence and findings: - Summons issued by the Central GST authorities following a search conducted on 16 January 2025. - Proceedings initiated by the State GST authorities based on a Show Cause Notice dated 18 November 2024. Application of law to facts: - The Court found that Section 6(2)(b) does not prohibit the Central GST authorities from issuing summons during a search conducted post the State GST proceedings. - The Court emphasized the distinction between a search/investigation and subsequent assessment proceedings. Treatment of competing arguments: - The petitioner argued that the State GST proceedings should take precedence over the Central GST summons. - The Court rejected this argument, stating that the summons issued during a search is a preliminary step and does not hinder the authorities from further assessment. Conclusions: - The Court dismissed the writ petition challenging the validity of the summons issued by the Central GST authorities. - The Court granted the petitioner liberty to request access to data stored on seized electronic devices from the competent Central GST authority for participation in the investigation. SIGNIFICANT HOLDINGS: - The Court clarified that Section 6(2)(b) does not bar the Central GST authorities from issuing summons during a search, as it is a preliminary step and does not hinder subsequent assessment proceedings. - The Court upheld the validity of the summons issued by the Central GST authorities and dismissed the writ petition challenging the same.
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