ORDER
1. In this petition, petitioner seeks for the following reliefs:-
| “i) | | Issue a Writ of Certiorari or direction in the nature of a writ of certiorari quashing the order in original passed under section 74 of the Act date 30.04.2024 issued by the Respondent No. 1 herein marked as Annexure-A1. |
| (ii) | | Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the summary of order in form GST DRC 07 dated 05.05.2024 passed by the Respondent No.1 herein marked as Annexure – A2 |
| (iii) | | Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the order of adjudication passed under section 73(9) of the Act dated 08.02.2024 issued by the Respondent No. 2 herein marked as Annexure-B1. |
| (iv) | | Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the summary of order in form GST DRC 07 dated 08.02.2024 passed by the Respondent No.2 herein marked as Annexure – B2. |
| (v) | | And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity” |
2. Heard learned counsel for the petitioner, learned counsel for respondent No.1 and learned HCGP for respondent No.2 and perused the material on record.
3. A perusal of the material on record will indicate that the Central GST Department initiated proceedings against the petitioner vide show-cause notice dated 19.10.2020 subsequent to which the State GST authorities issued summons dated 23.08.2023 and initiation dated 07.09.2023 subsequent to which a show-cause notice dated 19.12.2023 was issued by the State GST authorities stating that since the petitioner had filed GSTR-3B belatedly, he was eligible to claim input tax credit for the year 2018-19 and therefore issued another show cause notice dated 02.01.2024 to show cause as to why an order under Section 73(9) of the Act should not be issued. In the meanwhile, respondent No.2 issued intimation dated 26.12.2023 followed by another show cause notice dated 02.01.2024. Since the petitioner failed to submit reply to the aforesaid intimations/letters/show-cause notices, respondent No.2 proceeded to pass the impugned adjudication order dated 08.02.2024 at Annexure-A and thereafter respondent No.1 passed an order-in-original dated 30.04.2024, aggrieved by which petitioner is before this Court by way of the present petition, inter alia contending that in the light of the provisions contained in Section 6(2)(b) of the CGST/KGST Act, 2017, dual/parallel proceedings in relation to the very same subject matter are barred and since the Central GST authorities had already initiated proceedings against the petitioner, the impugned proceedings initiated by the respondents-State GST Authorities are not maintainable and liable to be quashed. In support of its contentions, petitioner places reliance upon the following judgments of this Court.
| (i) | | Toyota Kirloskar Motor (P.) Ltd. v. UOI (Karnataka)/2024 (10) TM1 1240 – Karnataka HC. |
| (ii) | | Huida Sanitaryware India (P.) Ltd. v. Deputy Commissioner of Central Tax (AE) GST West Commissionerate (Karnataka)– W.P. No. 14068/2023 dated 19.09.2024. |
| (iii) | | Toyota Logistics Kishor India (P.) Ltd. v. UOI (Karnataka)/2024 (10) TMI 1384 –Karnataka HC |
4. Per contra, learned HCGP for the respondents submits that there is no merit in the petition and that the same is liable to be dismissed.
5. Before adverting to the facts of the instant case, it would be necessary to refer to the provisions contained in Section 6 of the CGST/KGST Act, which read as under:
“Section 6 – Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances. – (1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification3, specify.
(2) Subject to the conditions specified in the notification issued under sub-section (1),—
| (a) | | where any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax; |
| (b) | | 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. |
(3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act.”
6. A bare/plain perusal of the aforesaid provisions will clearly indicates that where proceedings have already been initiated by the CGST Authorities, the State GST Authorities would not have jurisdiction or authority of law to initiate parallel/dual proceedings against the petitioner in relation to the very same subject matter, which are clearly barred under Section 6(2)(b) of the said Act. Under identical circumstances in the case of Toyota Kirloskar Motor (P.) Ltd. (supra) – Karnataka High Court, this Court held as under:
“In this petition, the petitioner seeks the following reliefs:
“a) Issue a writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ or order or direction under Article 226 of the Constitution of India quashing the impugned show cause notices bearing No. JCCT (VIG) / ACCT-3/GST/ADJN-14/23-24/1185 dated 05.08.2023 and impugned show cause notices bearing Nos.JCCT (VIG) / ACCT-3/GST/ADJN-15/23-24/1185 dated 05.08.2023 issued by the Respondent No.6 in FORM GST DRC-01 enclosed at Annexures – A and A-1 demanding input tax credit availed by the Petitioner along with interest and penalty;
(b) Issue a writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ or order or direction under Article 226 of the Constitution of India quashing the impugned Show Cause Notice No. DCCT(Audit)2.3/ 456/2023-24 dated 06.10.2023 issued by the Respondent No.7 along with the four FORM GST DRC-01’s dated 06.10.2023 enclosed at Annexures-A2 demanding input tax credit availed by the Petitioner along with interest and penalty;
(c) Issue a writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ or order or direction under Article 226 of the Constitution of India quashing the impugned show cause notice bearing No. GEXCOM/AE/INV/GST/3318/2022-AE-IV(BW) dated 27.09.2023 issued by the Respondent No. 4 in FORM GST DRC-01 enclosed at Annexure B demanding input tax credit availed by the Petitioner along with interest and penalty;
(d) Hold that the Petitioner has rightly availed input tax credit of Rs.43,60,57,822/ in respect of the IGST paid on manpower supply services received by the Petitioner during the period 2017- 2022.
(e) Pass such further order(s) and other reliefs as the nature and circumstances of the case may require.”
2. A perusal of the material on record will indicate that the petitioner is interalia engaged in business of assembly, manufacturing and trading in multi-utility vehicles and passenger cars in India. The petitioner is registered under the Central Goods and Services Act, 2017 (CGST Act) and the respondent Nos.1, 3 and 4 are the CGST authorities in the present petition. So also, respondent Nos.2, 5, 6 and 7 are the State GST Authorities under the Karnataka Goods and Services Act, 2017 (KGST Act). The petitioner seeks quashing of the impugned Show Cause Notice at Annexure — B dated 27.09.2023 issued by Central GST Authorities as well as the impugned Show Cause Notices at Annexures — A and Al both dated 05.08.2023 and also the impugned Show Cause Notice at Annexure — A2 dated 06.10.2023, all having been issued by the State GST authorities and for other reliefs.
3. The respondents have filed their statement of objections and have contested the petition.
4. Heard learned counsels for the parties and perused the material on record.
5. In addition to reiterating the various contentions urged in this petition and referring to the material on record, the learned counsel for the petitioner invited my attention to the impugned Show Cause Notices dated 05.08.2023 at Annexures — A and Al and impugned Show Cause Notice dated 06.10.2023 at Annexure – A2 issued by the State GST Authorities in order to point out that prior to issuance of the said Show Cause Notices, the Central — GST Authorities had already initiated proceedings in relation to the very same subject matter by issuing letters / notices on 11.08.2022 and 20.09.2022 onwards and consequently, in the light of the provisions contained in Section 6(2)(b) of the Karnataka Goods and Services Tax Act 2017 [for short, ‘the KGST Act, 2017], the impugned Show Cause Notices at Annexure — A, Al and A2 are illegal, arbitrary and without jurisdiction or authority of law since parallel / dual proceedings cannot be initiated by the State GST Authorities after the Central GST Authorities had already initiated proceedings prior to issuance of the impugned Show Cause Notices, which deserve to be quashed.
6. It is submitted by learned counsel for the petitioners that insofar as the impugned Show Cause Notice at Annexure — B dated 27.09.2023 issued by the Central GST Authorities is concerned, denial of input tax credit in favour of the petitioner in terms of Section 16(4) of the CGST Act, 2017 having been allegedly taken belatedly is contrary to the Circular No.211/5/24-GST dated 26.06.2024 as well as the judgment of this Court in the case of M/s. Bosch Limited v. the State of Karnataka and Deputy Commissioner of Commercial Taxes, 2024 VIL-828-KAR. It is also submitted that insofar as the demand made in Annexure — B dated 27.09.2023 demanding interest on GST towards amounts paid in favour of the employees’ salary in view of Section13(3)(c) and Section 128A of the CGST Act 2017, the petitioner would not be liable to pay interest as demanded in the said Show Cause Notice, which deserves to be quashed.
7. Per contra, the learned AGA for respondent Nos.2, 5, 6 and 7 — Central GST Authorities would not dispute that the summons, Show Cause Notices and the proceedings have been initiated by the State GST Authorities subsequent to the Central GST Authorities already initiating proceedings as against the petitioner and Section 6(2)(b) of the KGST Act was applicable to the facts of the instant case.
8. The learned counsel for the Central GST Authorities submits that if the petitioner submits a reply along with necessary documents to the impugned Show Cause Notice at Annexure-B dated 27.09.2023, the concerned respondent Nos.1, 3 and 4 would consider the same and proceed further in accordance with law.
9. A perusal of the material on record and the submissions made by both sides will clearly indicate that prior to the State GST Authorities issuing the impugned Show Cause Notices at Annexures – A, Al and A2 is concerned, the Central GST Authorities had already initiated proceedings as against the petitioner and consequently, in the light of Section 6(2)(b) of the KGST Act, 2017 which contemplates a complete bar / embargo on the State GST Authorities to initiate proceedings in a situation where the Central GST Authorities had already initiated proceedings as against the petitioner in respect of the same subject matter. I am of the considered view that the impugned Show Cause Notices at Annexures — A, Al and A2 are clearly illegal, arbitrary and without jurisdiction or authority of law and contrary to the aforesaid statutory provisions and the same deserve to be quashed.
10. Insofar as challenge to the impugned Show Cause Notice at Annexure – B dated 27.09.2023 issued by the respondent Nos.1, 3 and 4, Central – GST Authorities is concerned, the decision of this court in the case of M/s. Bosch Ltd. V. State of Karnataka & Ors., supra, read with the Circular No 211/5/24-GST dated 26.06.2024 is squarely applicable. As can be seen from Paragraph Nos.2.5, 2.6 & 2.7 of Circular, the petitioner would be entitled to avail ITC and cannot be deprived of the same or fastened with liability to pay interest on account of his claim having filed belatedly as can be seen from the circular.
11. The relevant portions of the decision of this court in the case of M/s. Bosch Ltd. V. State of Karnataka & Ors., is reproduced hereunder:
“5. Before adverting to the rival contentions, it is relevant to extract the aforesaid circular issued by the CBIC, which reads as under:
“2.5 It can be seen that section 16(4) of CGST Act links the time limit for ITC availment with the financial year to which the invoice or debit note pertains. As discussed in Para 2.3 above, in case of supplies where the supplier is unregistered and recipient is registered and the tax has to be paid by the recipient on RCM basis, the recipient is required to issue invoice in terms of the provisions of section 31 (3) (f) of CGST Act and pay the tax on the same in cash under RCM. Further, as discussed in Para 2.1 above, ITC cannot be availed by a registered person in respect of any supply of goods or services or both received by him, as per the provisions of section 16 (2) (a) of CGST Act, unless he is in possession of a tax invoice or debit note or such other tax paying documents as may be prescribed.
2.6 A combined reading of the above provisions leads to a conclusion that as ITC can be availed by the recipient only on the basis of invoice or debit note or other duty paying document, and as in case of RCM supplies received by the recipient from unregistered supplier, invoice has to be issued by the recipient himself, the relevant financial year, to which invoice pertains, for the purpose of time limit for availment of ITC under section 16(4) of CGST Act in such cases shall be the financial year of issuance of such invoice only. In cases, where the recipient issues the said invoice after the time of supply of the said supply and pays tax accordingly, he will be required to pay interest on such delayed payment of tax.
2.7 Accordingly, it is clarified that in cases of supplies received from unregistered suppliers, where tax has to be paid by the recipient under reverse charge mechanism (RCM) and where invoice is to be issued by the recipient of the supplies in accordance with section 31 (3) (f) of CGST Act, the relevant financial year for calculation of time limit for availment of input tax credit under the provisions of section 16(4) of CGST Act will be the financial year in which the invoice has been issued by the recipient under section 31(3)(f) of CGST Act, subject to payment of tax on the said supply by the recipient and fulfilment of other conditions and restrictions of section 16 and 17 of CGST Act. In case, the recipient issues the invoice after the time of supply of the said supply and pays tax accordingly, he will be required to pay interest on such delayed payment of tax. Further, in cases of such delayed issuance of invoice by the recipient, he may also be liable to penal action under the provisions of Section 122 of CGST Act.”
6. As can be seen from paragraph Nos.2.5, 2.6 and 2.7, the petitioner would be entitled to availment of ITC and cannot be deprived of the same or fastened with liability to pay interest on account of his claim having been filed belatedly as can be seen from the circular. The aforesaid circular completely supports the claim of the petitioner especially in the light of the judgment of the Apex Court in the K.P.VARGHESE v. INCOME TAX OFFICE, ERNAKULAM, AIR 1981 SC 1922 to the effect that a CBIC circular is binding upon the respondents. However, since the said circular was issued during the pendency of the present petition and the respondents did not have the benefit of the said circular at the time of issuance of the Show Cause Notice, I deem it just and appropriate to dispose of this petition and direct respondent No.2 to consider the objections to be filed by the petitioner and proceed further in accordance with law, bearing in mind the aforesaid circular and take appropriate decisions/pass appropriate orders in accordance with law.”
12. The challenge to the impugned Show Cause Notice at Annexure-B can be disposed of by directing the petitioner to submit a suitable reply together with the relevant documents and by directing the concerned respondent Nos.1, 3 and 4, Central — GST Authorities to consider the same and proceed further in accordance with law bearing in mind the observations made in this order and the provisions referred to supra (Section 13(3)(C) of the CGST Act, 2017, Section 128A of the CGST Act, 2017, Circular No. 211/5/24-GST dated 26.06.2024 etc.).
13. In the result, the following:
ORDER
| (i) | | The petition is allowed – in – part. |
| (ii) | | The impugned Show Cause Notices at Annexures — A, A1 and A2 dated 05.08.2023, 05.08.2023 and 06.10.2023, respectively, are hereby quashed. |
| (iii) | | The petitioner is reserved with liberty to submit reply along with documents to the impugned Show Cause Notice at Annexure — B dated 27.09.2023. |
| (iv) | | The concerned respondent Nos.1, 3 and 4, Central GST Authorities shall consider the said reply and documents to be submitted by the petitioner and proceed further in accordance with law after providing sufficient and reasonable opportunity to the petitioner and hearing it bearing in mind the observations made in this order as well as the relevant statutory provisions, Circulars and judgments and contentions relied upon by the petitioner and pass appropriate orders within a period of four weeks from the date of receipt of a copy of this order.” |
7. In Huida Sanitaryware India (P.) Ltd. (supra), this Court held as under:
“In this petition, petitioner seeks the following reliefs:
| (a) | | Set aside / quash the impugned show cause notice dated 15.09.2022 issued by the 1st respondent under section 122 of the GST Act in SCN No. 06/2022-23/GST/AE-1 (DIN-20220957YU00006176C6 2530) as per Annexure-C by issuing a Writ of Certiorari or any other order or writ in the nature of a Writ of Certiorari and consequently quash the entire proceedings. |
| (b) | | To grant any other relief/(s) this Hon’ble Court deems fit and proper in the facts and circumstances of the case. |
2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
3. A perusal of the material on record will indicate that on 11.08.2020, Karnataka State GST Authorities initiated proceedings by invoking Section 70 of the KGST Act against the petitioner, which ultimately culminated in the adjudication order dated 09.11.2022 under Section 73(1) of the KGST Act. In the meanwhile, respondent Nos.1 and 2/CGST Authorities also initiated penalty proceedings under Section 122 of the CGST Act in relation to the very same subject matter comprising of the transactions between the petitioner and one M/s. Crystal Hardware.
4. It is the specific contention of the petitioner that apart from the fact that the proceedings initiated by the CGST authorities after initiation of the proceedings by the Karnataka State GST Authorities in the very same subject matter, is barred under Section 6 (2) (b) of the CGST Act, penalty proceedings under Section 122 of the CGST Act are also barred by virtue of Section 74 of the CGST Act. It is therefore submitted that the impugned show cause notice and further proceedings pursuant thereto deserves to be quashed.
5. Per contra, learned counsel for the respondent supports the impugned order and submits that proceedings initiated by the CGST Authorities and State Government GST Authorities are different and the question of quashing Show Cause Notice does not arise and submits that there is no merit in the petition and the same is liable to be dismissed.
6. A perusal of the material on record in particular Annexure-C dated 15.09.2022 issued by CGST authorities and adjudication order dated 09.11.2022 at Annexure-D is sufficient to come to the conclusion that the both relates to the same subject matter in relation to the transaction between petitioner and M/s Crystal Hardware.
7. In this context, it is relevant to extract Section 6 of the CGST which reads as under.
“Section 6 – Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances 2
(1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.
(2) Subject to the conditions specified in the notification issued under sub-section (1),—
(a) where any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax;
(b) 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.
(3) Any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this Act shall not lie before an officer appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act.”
8. A plain reading of the aforesaid provision will indicate that when once proceedings have been initiated under KGST Act which culminated in the adjudication order, parallel/dual proceedings under CGST Act sought to be initiated by issuing Show Cause Notice under Section 122 of the CGST Act, are clearly barred and impermissible in law and impugned Show Cause Notice deserves to be quashed on this ground alone.
9. It is also relevant to note Section 74(11) of the CGST Act, which reads as under:
“74 (11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded.
Explanation 1.—For the purposes of section 73 and this section,—
(i) the expression —all proceedings in respect of the said notice shall not include proceedings under section 132;
(ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122, 125, 129 and 130 are deemed to be concluded.
Explanation 2.—For the purposes of this Act, the expression —suppression shall mean nondeclaration of facts or information which a taxable person is required to declare in the return, statement,
report or any other document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer.”
10. The aforesaid explanation No.1 clearly indicates that once proceedings are initiated under Sections 73 or 74, penalty proceedings under Section 122 are deemed to have been concluded and on this ground also, the impugned Show Cause Notice which purports under Section 122 of the CGST Act is clearly illegal and arbitrary and without jurisdiction or authority of law and contrary to the aforesaid provisions of law, warranting interference by this Court.
11. In the result, I pass the following:
ORDER
| (i) | | The Writ Petition is hereby allowed. |
| (ii) | | The impugned show cause notice dated 15.09.2022 issued by respondent No.1 at Annexure-C is hereby quashed.” |
8. In Toyota Logistics Kishor India (P.) Ltd. (supra) – Karnataka HC, this Court held as under:
“In this petition, petitioner seeks the following reliefs:
| (a) | | Issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ or order or direction under Article 226 of the Constitution of India quashing the impugned Show Cause Notice No.18/2023-24 ADC dated 28.09.2023 issued by the respondent No.3 enclosed at Annexure – A demanding input tax credit availed by the Petitioner along with interest and penalty; |
| (b) | | Hold that the Petitioner has rightly availed input tax credit of Rs.1,30,28,404/- in respect of the IGST paid on manpower supply services received by the petitioner during the period April 2019 to November 2022. |
| (c) | | Hold that the Respondent No.3 has arbitrarily issued the impugned Show Cause Notice No.18/2023-24 ADC dated 28.09.2023 enclosed at Annexure – A by erroneously invoking Section 74 of the CGST Act, 2017 / KGST Act, 2017; |
| (d) | | Pass such further order(s) and other reliefs as the nature and circumstances of the case may require. |
2. The petitioner is involved in the business of providing goods, transport agency services for completely built units and knocked down parts of motor vehicles in different routes throughout India and is registered under the Karnataka Goods and Services Act, 2017 (for short, ‘KG ST Act’).
3. The respondents are the Central GST Authorities under CGST Act. The petitioner seeks quashing of the impugned Show Cause Notice at Annexure — A dated 28.09.2023 issued by the respondent No.3 and for other reliefs.
4. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
5. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that the demand made by the respondents in the impugned Show Cause Notice was illegal, arbitrary and without jurisdiction or authority of law and opposed to the statutory provisions.
6. The learned counsel for the petitioner submits that the impugned Show Cause Notice proposes to raise two demands:
| (i) | | Demand of Rs.1,68,04,057/- being IGST payable on the taxable manpower supply services received by the Petitioner during the period July 2017 to November 2022, along with interest; and |
| (ii) | | Demand of Rs.1,30,28,404/- being input tax credit availed on manpower supply services received during the period April 2019 to November 2022. |
7. In regard to the first demand, the learned counsel for the petitioner submits that the impugned Show Cause Notice deserves to be quashed on the ground that proceedings were initiated by the State GST Authorities vide Show Cause Notice dated 12.05.2023 which culminated in an adjudication Order-In-Original dated 07.08.2023 which was thereafter set aside by the Appellate Authority vide Order dated 05.03.2024. The learned counsel for the petitioner submits that since the State GST Authorities had initiated the proceedings first, the impugned Show Cause Notice issued by the Central GST Authorities to the extent of demand of IGST in terms of Section 6(2)(b) of the CGST Act, 2017 deserves to be quashed.
8. With regard to the second demand, the learned counsel for the petitioner submits that the admissibility of input tax credit is covered by the Circular No. 211/5/2024-GST dated
26.06.2024 issued by the Central Board of Indirect Taxes and Customs, New Delhi as well as the judgments of this Court in the case of Bosch Limited v. State of Karnataka and others – 2024 VIL-828-KAR, and Musashi Autoparts Private India Ltd., v. State of Karnataka – W.P.No. 478/2024 dated 29.07.2024.
9. It is further submitted that the demand of interest on both the demands is not sustainable in view of the provisions of section 128A and section 13(3)(c) of the CGST Act.
10. Per contra, learned counsel for the respondents submits that if the petitioners submit a reply along with necessary documents to the impugned Show Cause Notice at Annexure — A, the concerned respondents would consider the same and proceed further in accordance with law.
11. A perusal of the material on record and the submissions made by both sides will clearly indicate that prior to issuance of the impugned Show Cause Notice dated 28.09.2023 at Annexure — A, the State GST Authorities had already initiated proceedings as against the petitioner proposing to demand IGST and consequently, in light of Section 6(2)(b) of the CGST Act, 2017, which contemplates a complete bar / embargo on the Central GST Authorities to initiate proceedings in a situation where the State GST Authorities had already initiate proceedings as against the petitioner on the same subject matter, I am of the considered view that the impugned Show Cause Notice at Annexure — A to extent of demand of IGST of Rs.1,68,04,057/- along with interest in the light of Section 6(2)(b) of the CGST Act, 2017 deserves to be quashed.
12. With regard to the denial of input tax credit on the alleged violation of Section 16(4) of the CGST Act, 2017, the issue is covered by the judgment of this Court in the case of Bosch Limited v. State of Karnataka and others – 2024 VIL-828-KAR, and Musashi Autoparts Private India Ltd., v. State of Karnataka – W.P.No. 478/2024 dated 29.07.2024 and the Circular No. 211/5/2024-GST dated 26.06.2024 issued by the Central Board of Indirect Taxes and Customs, New Delhi. In my view, the input tax credit has been validly availed in terms of the decisions and Circular referred to supra.
13. In view of the aforesaid facts and circumstances, I deem it just and appropriate to dispose of this petition by issuing certain directions.
14. In the result, I pass the following:
ORDER
| (i) | | Petition is hereby disposed of. |
| (ii) | | The impugned Show Cause Notice at Annexure — A dated 28.09.2023 issued by the Respondent No. 3 to the extent of demand of IGST of Rs.1,68,04,057/- along with interest in terms of Section 6(2)(b) of the CGST Act, 2017 is hereby quashed; |
| (iii) | | The petitioner is reserved with liberty to submit a reply along with documents to the impugned Show Cause Notice at Annexure — A dated 28.09.2023 to the extent of demand of input tax credit of Rs.1,30,28,404/- along with interest, within a period of three weeks from the date of receipt of a copy of this order. |
| (iv) | | The concerned respondents shall consider the said reply and documents to be submitted by the petitioner and proceed further in accordance with law after providing sufficient and reasonable opportunity of hearing to the petitioner and bearing in mind the observations made in this order as well as the relevant statutory provisions, Circulars, judgments, contentions, etc., relied upon by the petitioner and pass appropriate orders within a period of four weeks from the date of receipt of the Reply to be filed by the petitioner.” |
9. In the instant case, the material on record clearly establishes that the Central GST Authorities having already initiated proceedings against the petitioner vide show-cause notice dated 19.12.2023, the subsequent dual/parallel proceedings initiated by the respondent – State GST Authorities are clearly not maintainable and barred under Section 6(2)(b) and consequently, in the light of the principles laid down by this Court in the judgments referred to supra, I am of the considered opinion that the impugned show-cause notice and order passed by the concerned respondents deserve to be quashed.
10. In the result, I pass the following:
ORDER
| (i) | | The Petition is allowed. |
| (ii) | | The impugned order-in-original dated 30.04.2024 at Annexure-A1, summary order dated 05.05.2024 at Anenxure-A2 passed by respondent No.1 and the impugned adjudication order dated 08.02.2024 at Annxure-B1 and the summary of order dated 08.02.2024 at Annexure-B2 passed by respondent No.2 are hereby quashed. |