State GST SCN Stayed Pending DGGI Proceedings; No Coercive Action

State GST SCN Stayed Pending DGGI Proceedings; No Coercive Action

Parallel proceedings under CGST and SGST can be stayed if the same period is under investigation by DGGI.

Issue: Whether a show cause notice (SCN) issued by the State GST authority under Section 73 of the CGST Act, 2017, should be stayed when the same tax period is already under investigation and adjudication by the Directorate General of GST Intelligence (DGGI), Chandigarh.

Facts:

• The assessee challenged an SCN issued by the State GST authority under Section 73.
• The assessee contended that the same tax period was already the subject matter of investigation and adjudication pursuant to an SCN issued by DGGI, Chandigarh.
• The revenue submitted that no further steps would be taken on the impugned SCN pending the outcome of the DGGI proceedings.

Decision:

• The court disposed of the petition, recording the revenue’s statement that no coercive steps would be taken on the impugned SCN until the conclusion of the DGGI proceedings.

Key Takeaways:

• Overlapping Jurisdiction: When multiple authorities initiate proceedings for the same tax period, it can lead to overlapping jurisdiction and conflicting decisions.
• DGGI Proceedings Prevail: In this case, the revenue agreed to stay the State GST proceedings pending the outcome of the DGGI proceedings, acknowledging the DGGI’s broader investigative powers.
• No Coercive Action: The court’s order ensures that the assessee is protected from coercive action by the State GST authority until the DGGI proceedings are concluded.
• Prevention of Duplication: This decision prevents duplication of proceedings and ensures that the assessee is not subjected to multiple investigations for the same issue.
• Clarity and Certainty: The court’s order provides clarity and certainty to the assessee, preventing unnecessary harassment and litigation.
• The court is ensuring that the tax payer is not subjected to multiple investigations for the same issue, and is allowing the DGGI investigation to conclude first.