The Allahabad High Court while dismissing the petition allowed the collateral inquiry proceedings by GST Authorities under Section 70 of CGST Act, 2017 collaterally with the proceedings under section 6(2)(b).
The petitioner, M/S G.K.Trading Company submitted that the Deputy Commissioner (SIB), Ghaziabad, has conducted a survey of the business premises of the petitioner and is investigating in the matter pursuant to the survey, no inquiry can be initiated or summon can be issued by the respondent authority under Section 70 of the CGST Act against the petitioner even if basis of material of inquiry/ investigation may be different.
In other words, the State Authority may investigate/ inquire in all the matters pertaining to the business of the petitioner and, therefore, the summons in the matter of inquiry issued by the officer is barred by the provisions of Section 6(2)(b) of the CGST Act.
The Section 6(2)(b) prohibits initiation of proceedings by the proper officer under UPGST Act on the same subject-matter where a proper officer under the CGST Act has initiated any proceedings on the same subject-matter subject to the conditions specified in the notification issued under sub-Section (1).
The Section 70 of the UPGST Act or CGST Act empowers the proper officer under the Act to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry.
The division bench of Justice Surya Prakash Kesarwani and Justice Dr. Yogendra Kumar Srivastava clarified that the process of inquiry under Section 70 is specific and unified by the very purpose for which provisions of Chapter XIV of the Act confer power upon the proper officer to hold an inquiry. The word “inquiry” in Section 70 is not synonymous with the word “proceedings”, in Section 6(2)(b) of the UPGST Act/ CGST Act.
Therefore, the court held that there is no proceeding by a proper officer against the petitioner on the same subject-matter referable to Section 6(2)(b) of the UPGST Act. It is merely an inquiry by a proper officer under Section 70 of the CGST Act.
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