2025 (3) TMI 1309 - HC - GST

Validity of simultaneous/dual/parallel proceedings in relation to the same year 2018-19 - HELD THAT - As rightly contended by learned counsel for the petitioner respondent No. 1-Assistant Commissioner and respondent No. 2-Deputy Commissioner have ventured to initiate simultaneous/dual/parallel proceedings in relation to the same year 2018-19 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. 1 and 2 deserves to be quashed by reserving liberty in favour of the respondent No. 2 Deputy Commissioner to proceed further in accordance with law. Matter is remitted back to respondent No. 2 for reconsideration afresh in accordance with law to the stage of replying to Show Cause Notice dated 19.12.2023 issued by respondent No. 2 to the petitioner - Petition allowed by way of remand.

1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment include:

Whether the simultaneous or dual proceedings initiated by the Assistant Commissioner and the Deputy Commissioner against the petitioner for the same tax period are permissible under the law, specifically in light of Section 6(2)(b) of the CGST/KGST Act.
Whether the orders issued by the respondents should be quashed due to the alleged impermissibility of these dual proceedings.
Whether the petitioner is entitled to relief in the form of quashing the impugned orders and remitting the matter back to the Deputy Commissioner for reconsideration.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Permissibility of Simultaneous/Dual Proceedings

Relevant Legal Framework and Precedents: The legal framework under scrutiny is Section 6(2)(b) of the CGST/KGST Act, which prohibits simultaneous or dual proceedings by Central and State Authorities for the same matter.
Court's Interpretation and Reasoning: The Court found that the actions of the Assistant Commissioner and the Deputy Commissioner in initiating simultaneous proceedings against the petitioner for the same tax period were impermissible. The Court emphasized the principle underlying Section 6(2)(b) that aims to prevent such parallel proceedings to avoid conflict and ensure procedural fairness.
Key Evidence and Findings: The Court noted that both respondents issued separate show cause notices and adjudication orders for the same tax period, which were based on identical contentions against the petitioner.
Application of Law to Facts: The Court applied Section 6(2)(b) to the facts, concluding that the dual proceedings were in violation of the legal prohibition against such actions.
Treatment of Competing Arguments: The petitioner argued against the legality of dual proceedings, while the respondents contended that the petition lacked merit. The Court sided with the petitioner, finding the dual proceedings unlawful.
Conclusions: The Court concluded that the impugned orders should be quashed due to the impermissibility of the dual proceedings.

Issue 2: Quashing of Impugned Orders and Remittance

Relevant Legal Framework and Precedents: The Court considered the procedural requirements under Section 73 of the KGST Act for issuing show cause notices and adjudication orders.
Court's Interpretation and Reasoning: The Court determined that the procedural irregularities stemming from the dual proceedings warranted quashing the orders and remitting the matter back to the Deputy Commissioner for fresh consideration.
Key Evidence and Findings: The Court noted the issuance of multiple show cause notices and adjudication orders for the same period, which contributed to procedural confusion and potential injustice.
Application of Law to Facts: The Court applied the procedural requirements of the KGST Act to the facts, finding that the process followed by the respondents was flawed and required correction.
Treatment of Competing Arguments: The petitioner sought quashing of the orders, while the respondents argued for their validity. The Court found in favor of the petitioner, emphasizing the need for procedural integrity.
Conclusions: The Court concluded that the matter should be remitted to the Deputy Commissioner for reconsideration, ensuring compliance with legal procedures.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "Respondent No. 1-Assistant Commissioner and respondent No. 2-Deputy Commissioner have ventured to initiate simultaneous/dual/parallel proceedings in relation to the same year 2018-19 by putting forth the very same contentions against the petitioner, which is clearly impermissible in law."
Core Principles Established: The judgment reinforces the principle that simultaneous proceedings by different authorities for the same matter are impermissible under Section 6(2)(b) of the CGST/KGST Act.
Final Determinations on Each Issue: The Court allowed the petition, quashed the impugned orders, and remitted the matter back to the Deputy Commissioner for fresh consideration. The petitioner was directed to appear before the Deputy Commissioner on a specified date, and the proceedings were to be treated under Section 73(9) of the Act.