State GST authorities had no jurisdiction to issue show cause notice after CGST authorities had already issued show cause notice on same subject matter.

Summary in Key Points:

Issue: Could both Central GST (CGST) and State GST (SGST) authorities issue show cause notices on the same subject matter?
Facts: The petitioner challenged the jurisdiction of the SGST authorities after both CGST and SGST authorities issued show cause notices on the same issue.
Decision: The court held that the SGST authorities lacked jurisdiction to issue a notice after the CGST authorities had already issued a show cause notice on the same matter. The impugned order by the SGST authorities was set aside, and the CGST authorities were allowed to continue with the proceedings.

Important Note: This decision clarifies jurisdictional issues in situations where both CGST and SGST authorities initiate proceedings on the same subject matter. It establishes that the authority that issues the show cause notice first has jurisdiction over the matter, preventing parallel proceedings and potential conflicting decisions. This ruling ensures a more streamlined and efficient tax administration process by avoiding duplication of efforts and potential harassment of taxpayers.

HIGH COURT OF ALLAHABAD

Bio Veda Action Research Company

Union of India

Arun Bhansali, CJ.
AND Vikas Budhwar, J.

WRIT TAX No. 1861 of 2024

DECEMBER 6, 2024

Atul Gupta, for the Petitioner., Ankur Agarwal, S.C., Dhananjay Awasthi, Gaurav Mahajan, Naveen Chandra Gupta for the Respondent.

ORDER

1. This writ petition has been filed by the petitioner aggrieved of the order dated 25.08.2024 along with summary of order in Form DRC-07 to the extent prejudicial to the petitioner.

2. Submissions have been made that on the subject matter, a show cause notice dated 02.06.2022 had already been issued by the CGST authorities. On the same subject matter, the State GST authorities also issued a notice dated 30.05.2024 and though an objection with regard to the jurisdiction dated 22.08.2024 in terms of provisions of Section 6(2)(b) of the CGST Act, 2017 was raised by the petitioner without taking the same into consideration, the order impugned dated 25.08.2024 has been passed.

3. By order dated 11.11.2024, after noticing the contention raised by the petitioner, learned counsel appearing for the State GST authorities was directed to complete his instructions.

4. Learned Standing Counsel, Mr. Ankur Agarwal, on instructions, submits that the notice indeed was issued subsequent to the proceedings initiated by the CGST authorities and therefore, the respondents are prepared to withdraw the same/the same may be set aside by the Court.

5. Counsel appearing for the CGST authorities submits that the proceedings before the authorities are in progress.

6. Counsel for the petitioner submits that hearing in the matter has already taken place before the CGST authorities.

7. In view of the above admitted factual and legal position, the petition, filed by the petitioner, is allowed. The impugned order dated 25.08.2024 is quashed and set aside. The CGST authorities may continue with the proceedings in accordance with law.