23 Mar Central GST Authority cannot initiate proceedings when State GST Authority has already initiated proceedings on the same subject matter
The Gauhati High Court, in the matter of Rajesh Mittal vs Union of India [WP(C) No. 371 of 2024 dated January 25, 2024], based its decision on sub-clause (b) of sub-section (2) of Section 6 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”). It ordered a halt to the proceedings initiated by the Revenue Department. The court ruled that the Central GST Authority had improperly issued the Show Cause Notice (SCN) when the State GST Authorities had already issued an SCN on the same issue.
Facts of the case:
- Rajesh Mittal, hereinafter referred to as "the Petitioner," was served a Show Cause Notice (SCN) by both the State GST Authorities and the Central GST Authority.
- The State GST Authorities issued the SCN on December 01, 2023, while the Central GST Authority issued theirs on December 27, 2023.
- The notices accused the Petitioner of wrongfully availing input tax credit (ITC), violating Section 16(4) of the Central Goods and Services Tax Act, 2017 ("the CGST Act").
- The Petitioner responded to the notices accordingly.
Held:
The Gauhati High Court, in the case of WP(C) No. 371 of 2024 dated January 25, 2024, based its decision on sub-clause (b) of sub-section (2) of Section 6 of the CGST Act.
- The court stayed the proceedings initiated by the Respondent (Revenue Department) because it deemed that the Central GST Authority had erred in issuing the SCN.
- The court ruled that when State GST Authorities have already initiated proceedings on the same issue, the Central GST Authority should refrain from issuing duplicate notices.
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