The Madras High Court held that mere pendency of GST proceedings before State authorities was not a ground to restrain Central authorities from conducting an investigation.
The petitioner, Kuppan Gounder P.G.Natarajan has raised the issue where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.
Relying on the prohibitory clause, Mr.E.OM Prakash Senior counsel made a submission that notice for intimating discrepancies in the return after some scrutiny, was issued by the State authorities to the petitioner on 17.12.2020 and the proceedings are in progress. While so, Central authorities are bound to wait till the conclusion of the proceedings initiated by the State officials under the State Goods and Services Tax Act, and thus, the summons issued by the respondent is without jurisdiction.
Mr.V.Sundareswaran, Senior Panel counsel appearing on behalf of the respondent disputed the contentions raised by the petitioner by stating that the writ petitioner has already filed four writ petitions and stalling the entire investigation process by one way or another and he is not cooperating for the continuance and completion of the investigation process in respect of IGST. It is contended that the State action regarding the scrutiny proceedings of the return filed by the petitioner and the impugned summons are issued by the Central authorities under Section 70 of the Act regarding IGST. Therefore, these two are unconnected and as per the provisions, if the subject matter is one and the same, then alone, the proceedings need to be kept in abeyance and not otherwise.
The Single Judge Bench of Justice S.M. Subramaniam said that it is to be established that subject matter is one and the same. Mere pendency of proceedings before the State authorities is not a ground to restrain the Central authorities from issuing summons and conduct investigations regarding certain allegations. Therefore, all these factors require adjudication before the competent authority and if the summons is kept in abeyance at this stage, the same would paralyze the entire proceedings, which is not only desirable but would cause prejudice to the interest of the Revenue in the present case.
“The petitioner is at liberty to respond to the summons by producing all relevant documents, evidence, statements, etc., and defend his case in the manner known to law. The respondent is also at liberty to proceed with the investigation by following the procedures as contemplated under the Statute and Rules,” the court directed.
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