Parallel GST Proceedings Consolidated: DGGI Transfers Case to State GST Officer
Issue:
Whether parallel proceedings initiated by both the State GST Officer and the Senior Intelligence Officer, DGGI, are permissible, and what recourse is available to an assessee aggrieved by such dual proceedings.
Facts:
The assessee was aggrieved by the initiation of parallel proceedings by two different authorities: the State GST Officer and the Senior Intelligence Officer, DGGI. This grievance arose from a notice issued under Section 70 of the Central Goods and Services Tax Act, 2017 (CGST Act), requiring the assessee to give evidence and produce documents. The assessee filed a petition seeking substantive relief against these parallel proceedings.
The State GST Officer submitted that a summon had been issued to the assessee, to which the assessee had already submitted a reply. It was further contended by the State GST Officer that the Senior Intelligence Officer, DGGI, had initiated proceedings much later than the State GST Officer. Therefore, it was suggested that the assessee should be directed to respond to the State GST Officer for concluding the proceedings.
Decision:
The court, upon reviewing the records, found that the Senior Intelligence Officer, DGGI, had already transferred the proceedings, and they were now pending before the State GST Officer. Accordingly, the petition filed by the assessee was disposed of. The decision was effectively in favor of the assessee as the grievance of parallel proceedings was resolved by consolidation.
Key Takeaways:
- Avoidance of Parallel Proceedings: While Section 6 of the CGST Act (read with the respective State GST Acts) generally allows both central and state authorities to exercise powers, the intention is to avoid harassment to taxpayers through parallel investigations on the same subject matter.
- Role of DGGI and State Authorities: The Directorate General of GST Intelligence (DGGI) is a central intelligence agency, while State GST Officers operate under their respective state jurisdictions. Both have powers to investigate GST evasion.
- Transfer of Proceedings: In cases where parallel proceedings are initiated by different authorities on the same subject, it is a common and desirable practice to consolidate the proceedings under one authority to prevent duplication of effort, conflicting demands, and harassment of the assessee.
- Resolution Through Consolidation: The court’s decision to dispose of the petition because the DGGI had already transferred the proceedings to the State GST Officer effectively resolves the assessee’s grievance of parallel proceedings, as the proceedings are now unified under a single authority.
- Section 70 of CGST Act: This section grants the power to issue summons to persons to give evidence and produce documents for inquiries.
- In Favour of Assessee (Procedurally): Although no pronouncement on the merits of the demand was made, the decision is in favor of the assessee as it streamlines the investigation process, preventing the burden of responding to two separate agencies for the same issue.