G.K. Trading Company vs Union of India

The case in question involves a writ petition filed by the petitioner, seeking relief from certain actions initiated by the respondents. Sri Praveen Kumar, representing the petitioner, and Sri C. B. Tripathi, the special counsel for the Union of India, presented their arguments.

The petitioner’s prayer for relief includes:

1.A mandamus directing respondent nos. 3 and 4 to cease any inquiry against the petitioner and refrain from taking coercive measures based on the impugned summons.

2.Any other suitable writ, order, or direction deemed fit by the court under the circumstances.

3.Awarding costs of the petition to the petitioner.

Key submissions by Sri Praveen Kumar include:

1.Noting that respondent no. 5 inspected the petitioner’s business premises on 30.05.2018, followed by a summon dated 02.06.2018 under Section 70 of the U.P. GST Act.

2.Highlighting a subsequent summon dated 14.09.2020 issued by respondent no. 5, Assistant Commissioner (SIB), Commercial Tax, Range-C, Ghaziabad, under Section 70 of the U.P. GST Act, requesting explanation regarding two input tax credits claimed by the petitioner.

3.Pointing out that after the summon dated 02.06.2018, respondent no. 4 issued another summon dated 24.07.2019 under Section 70(1) of the CGST Act.

It appears that the petitioner is contesting the legality and procedural correctness of the summons issued by the respondents, particularly questioning the validity of the inquiries and the coercive measures taken against them. The arguments presented suggest a contention that due process may not have been followed or that the summons themselves may be unjustified.

The case at hand involves a writ petition filed by the petitioner seeking relief from ongoing inquiries initiated against them. Represented by Sri Praveen Kumar, learned counsel, the petitioner requests the court to issue a mandamus against respondents 3 and 4, preventing them from pursuing any further inquiry and coercive actions based on the impugned summons. Additionally, they seek any other suitable relief deemed fit by the court and the award of costs.

Sri Praveen Kumar presents several arguments on behalf of the petitioner:

1.The respondent no. 5 conducted an inspection of the petitioner’s business premises on 30.05.2018, followed by a summons dated 02.06.2018 under Section 70 of the U.P. GST Act. Subsequently, another summons dated 14.09.2020 was issued by respondent no. 5, requiring the petitioner to explain certain input tax credits.

2.Despite these summonses, respondent no. 4 issued summonses under Section 70(1) of the CGST Act-2017 on 24.07.2019, 26.08.2019, and 26.08.2020, demanding the petitioner’s statement in the ongoing inquiry.

3.According to Section 6(2)(b) of the U.P. GST Act, once an inquiry is initiated by respondent no. 5, respondents 3 and 4 are barred from initiating any further proceedings against the petitioner.

4.Since an inquiry has already commenced under respondent no. 5, respondents 3 and 4 are prohibited from conducting any additional inquiries against the petitioner.

In response, Sri C.B. Tripathi, learned special counsel for the State-respondents, presents counterarguments:

1.Section 6(2)(b) of the U.P. GST Act prohibits the initiation of proceedings on the same set of facts but does not bar inquiries by authorities under either the U.P. or Central Acts.

2.While the term “inquiry” is used in Section 70 of the CGST Act, the term “proceeding” is used in Section 6(2)(b) of the U.P. GST Act. This implies that Section 6(2)(b) only prohibits “proceedings” and not “inquiries.”

3.The jurisdiction of respondent nos. 2 and 5 under the U.P. GST Act is limited to the state of Uttar Pradesh, while the jurisdiction under the Central Act extends to the entire country.

4.The subject matter of the inquiry by respondents 3/4 under the CGST Act differs from that of the inquiry by respondent no. 5 under the U.P. GST Act. The former focuses on a wider range of issues beyond those investigated by respondent no. 

5.In summary, the petitioner seeks relief from ongoing inquiries initiated by respondents 3 and 4, citing legal provisions prohibiting multiple proceedings on the same set of facts. Conversely, the State-respondents argue that such provisions do not apply to inquiries and that the subject matter and jurisdiction of the inquiries differ, justifying their continuation.

financial year 2017-18 and 2018-19 and audited copies of annual return for the financial year 2017-18.

1.Aggrieved by the summon issued by respondent nos. 3 and 4, the petitioner has preferred the present writ petition.

2.The learned counsel for the petitioner submits that once inquiry has been initiated by respondent No.5 under U.P. GST Act, 2017, the respondent nos. 3 and 4 cannot initiate any proceeding against the petitioner in view of the provisions of Section 6(2)(b) of the Act.

3.On the other hand, the learned special counsel for the Staterespondents submits that the subject matter of inquiry by respondent nos. 3 and 4 under the CGST Act, 2017 is different or wider than the subject matter of inquiry by respondent No.5 under the U.P. GST Act, 2017. It is further submitted that the inquiry by respondent No.5 is confined only to some incriminating material found in the survey dated 30.05.2018 and the evidences of Input Tax Credit illegally taken by the petitioner on the basis of invoices of two alleged dealers, whereas no such facts are indicated in the summons issued by respondent nos. 3 and 4. Therefore, even the inquiry is not on the same set of facts.

4.We have heard learned counsel for the parties and perused the record.

5.Section 6(2)(b) of the U.P. GST Act, 2017 reads as under:- “6. Power to grant exemption from tax. (1) …… (2) Where the State tax authority or the Central tax authority has, by an order issued either suo motu, or on an application filed by the registered person, under this Act or under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, already initiated any proceeding on the basis of the impugned issue, no proceedings shall be initiated by the other tax authority on the same issue.”

6.A bare perusal of the above provision makes it clear that where the State tax authority or the Central tax authority has, by an order issued either suo motu, or on an application filed by the registered person, under this Act or under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, already initiated any proceeding on the basis of the impugned issue, no proceedings shall be initiated by the other tax authority on the same issue.

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