2025 (3) TMI 1175 - HC - GST

Validity of simultaneous or parallel proceedings initiated by respondent Nos. 5 and 6 under Section 73 of the KGST Act for the same financial year - HELD THAT - The respondent No. 6 Assistant Commissioner and respondent No. 5 Deputy Commissioner have ventured to initiate simultaneous / dual / parallel proceedings in relation to the same year 2019-20 by putting forth the very same contentions against the petitioner which is clearly impermissible in law and consequently the impugned orders passed by respondent Nos.5 and 6 deserve to be quashed by reserving liberty in favour of respondent No. 5 Deputy Commissioner to proceed further in accordance with law. Matter is remitted back to respondent No. 5 for reconsideration afresh in accordance with law to the stage of replying to Show Cause Notice dated 30.05.2024 issued by respondent No. 5 to the petitioner - Petition allowed by way of remand.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the simultaneous or parallel proceedings initiated by respondent Nos. 5 and 6 under Section 73 of the KGST Act for the same financial year are permissible under the law.
Whether the impugned orders and notifications issued by the respondents are legally valid and within the scope of the CGST and KGST Acts.
Whether the petitioner is entitled to relief from the impugned proceedings and orders based on the principles underlying Section 6(2)(b) of the CGST/KGST Act.

2. ISSUE-WISE DETAILED ANALYSIS

Simultaneous Proceedings under Section 73 of the KGST Act

Relevant Legal Framework and Precedents: The proceedings in question were initiated under Section 73 of the KGST Act, which deals with the determination of tax not paid or short paid. Section 6(2)(b) of the CGST/KGST Act prohibits simultaneous proceedings by both Central and State authorities for the same issue.
Court's Interpretation and Reasoning: The Court found that the simultaneous proceedings by respondent Nos. 5 and 6 were impermissible under the law. The Court emphasized the prohibition on dual proceedings as outlined in Section 6(2)(b) of the CGST/KGST Act, which aims to prevent duplication and conflict in tax assessments by different authorities.
Key Evidence and Findings: The evidence included the show-cause notices and orders issued by both respondents for the same financial year, which the Court found to be duplicative and conflicting.
Application of Law to Facts: The Court applied the prohibition on simultaneous proceedings to the facts, determining that the actions of the respondents were contrary to the statutory framework.
Treatment of Competing Arguments: The respondents argued that the proceedings were valid, but the Court rejected this, siding with the petitioner's contention that such parallel actions were not permissible.
Conclusions: The Court concluded that the actions of respondent Nos. 5 and 6 were unlawful and quashed the impugned orders and notices.

Validity of Impugned Notifications

Relevant Legal Framework and Precedents: The petitioner challenged several notifications as being ultra vires the provisions of Section 168A of the CGST Act. This section grants powers to issue notifications under specific circumstances.
Court's Interpretation and Reasoning: The Court did not provide a detailed analysis of each notification's validity, as the primary focus was on the procedural impropriety of simultaneous proceedings.
Conclusions: The Court's order primarily addressed the procedural issue, leaving the question of the notifications' validity largely unexamined in this judgment.

3. SIGNIFICANT HOLDINGS

Verbatim Quotes of Crucial Legal Reasoning: The Court stated, "Respondent No. 6 - Assistant Commissioner and respondent No. 5 - Deputy Commissioner have ventured to initiate simultaneous / dual / parallel proceedings... which is clearly impermissible in law."
Core Principles Established: The judgment reinforces the principle that simultaneous proceedings by different authorities for the same issue and period are not permissible under the CGST/KGST Act.
Final Determinations on Each Issue: The Court quashed the orders and notices issued by respondent Nos. 5 and 6, remitting the matter back to respondent No. 5 for fresh consideration in accordance with the law. The Court clarified that this decision was based on the specific facts of the case and should not be treated as a precedent.

The Court allowed the petition, quashing the impugned orders and notices, and directed the petitioner to appear before respondent No. 5 for further proceedings. The Court also provided the petitioner the opportunity to seek benefits under the GST Amnesty Scheme following the conclusion of the revised proceedings. This judgment highlights the importance of adhering to statutory provisions that prevent overlapping jurisdiction and duplicative legal actions by different tax authorities.

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