The Court quashes the show cause notice issued by state authorities as inquiry has already initiated by central tax authority
Section 67 of the CGST Act, 2017— Search and Seizure – Overlapping of Proceedings by State and Central GST --The petitioner submitted that an investigation was conducted by the DGGSTI, Bhubaneswar Zonal Unit under Section 67 of the Act and documents were seized during the search. The proceeding is still pending. The state GST has issued SCN on 23rd July, 2019. The petitioner replied that since the DGGSTI, Bhubaneswar has seized all the documents and issued summons, the proceedings initiated by the them should be kept in abeyance. But the State GST passed an order under Section 74, requiring the Petitioner to pay a sum of Rs. 3,74,74,957.95 towards GST, interest, penalty. A separate order was also passed under Section 74(9). The petitioner relied upon the CBIC D.O. letter dated 5th October, 2018, wherein it is clarified that the authority which initiates such action is empowered to complete the entire process of investigation, issuance of SCN, adjudication, recovery, filing of appeal etc. arising out of such action. The State authorities submitted that there were not knowing that the Central tax authority was seized of the matter. The petitioner counsel submitted that the Petitioner had written to state GST pointing out that the DGGI was already seized of the matter.
Held that:- The Hon’ble High Court allowed the petition and quashed the show cause notice dated 23rd July, 2019, the impugned order dated 5th November, 2019 and directed that till the conclusion of the proceeding initiated against the Petitioner by the DGGI, no coercive action be taken against the Petitioner.
The Court quashes the show cause notice issued by state authorities as inquiry has already initiated by central tax authority
Section 67 of the CGST Act, 2017— Search and Seizure – Overlapping of Proceedings by State and Central GST --The petitioner submitted that an investigation was conducted by the DGGSTI, Bhubaneswar Zonal Unit under Section 67 of the Act and documents were seized during the search. The proceeding is still pending. The state GST has issued SCN on 23rd July, 2019. The petitioner replied that since the DGGSTI, Bhubaneswar has seized all the documents and issued summons, the proceedings initiated by the them should be kept in abeyance. But the State GST passed an order under Section 74, requiring the Petitioner to pay a sum of Rs. 3,74,74,957.95 towards GST, interest, penalty. A separate order was also passed under Section 74(9). The petitioner relied upon the CBIC D.O. letter dated 5th October, 2018, wherein it is clarified that the authority which initiates such action is empowered to complete the entire process of investigation, issuance of SCN, adjudication, recovery, filing of appeal etc. arising out of such action. The State authorities submitted that there were not knowing that the Central tax authority was seized of the matter. The petitioner counsel submitted that the Petitioner had written to state GST pointing out that the DGGI was already seized of the matter.
Held that:- The Hon’ble High Court allowed the petition and quashed the show cause notice dated 23rd July, 2019, the impugned order dated 5th November, 2019 and directed that till the conclusion of the proceeding initiated against the Petitioner by the DGGI, no coercive action be taken against the Petitioner.