Kuppan Gounder P.G.Natarajan  Vs Directorate General of GST Intelligence

The discussion surrounding the writ petition filed challenging the summons issued by the Senior Intelligence Officer under Section 70 of the Central Goods and Services Tax Act, 2017 (referred to as ‘the Act’) brings to light an essential legal contention. The focal point, as argued by the learned Senior Counsel representing the petitioner, revolves around Section 6(2)(b) of the Act. This section stipulates that if a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has already initiated proceedings on a particular subject matter, then no further proceedings can be initiated by the proper officer under the Central Goods and Services Tax Act on the same subject matter.

The crux of the petitioner’s argument, therefore, hinges on the interpretation of this prohibitory clause. The learned Senior Counsel asserts that since the State authorities had already initiated proceedings by issuing a notice to the petitioner regarding discrepancies in the return on 17th December 2020, and these proceedings are currently underway, the Central authorities are obligated to await the conclusion of these ongoing proceedings. In essence, the contention is that the initiation of proceedings by the State authorities precludes any parallel or subsequent action by the Central authorities concerning the same subject matter.

This legal argument underscores the importance of procedural adherence and the delineation of jurisdictional boundaries between the State and Central tax authorities. The crux of the matter lies in determining whether the initiation of proceedings by one authority effectively bars the other from taking action on the same subject matter, as mandated by Section 6(2)(b) of the Act. The interpretation of this provision will significantly impact the outcome of the writ petition and, consequently, the validity of the summons issued by the Senior Intelligence Officer.

Ultimately, the resolution of this legal dispute will hinge on the court’s interpretation of the relevant statutory provisions and their application to the specific circumstances of the case. It will require a meticulous examination of legislative intent, judicial precedent, and the procedural intricacies of tax law to arrive at a just and equitable determination. Until such resolution is reached, the legality and enforceability of the summons issued by the Senior Intelligence Officer remain subject to scrutiny and challenge.

The discussion in this legal matter revolves around a writ petition filed challenging a summons issued by a Senior Intelligence Officer under Section 70 of the Central Goods and Services Tax Act, 2017 (referred to as ‘the Act’). The central argument put forth by the petitioner’s counsel is grounded in Section 6(2)(b) of the Act, which stipulates that if proceedings on a subject matter have been initiated by the proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, no proceedings shall be initiated under the Central Goods and Services Tax Act on the same subject matter.

The petitioner’s counsel contends that proceedings regarding discrepancies in the petitioner’s return had already been initiated by the State authorities and were ongoing. Therefore, according to the prohibitory clause in Section 6(2)(b), the Central authorities should wait until the conclusion of the proceedings initiated by the State officials before initiating any action. Consequently, the summons issued by the respondent is deemed to lack jurisdiction.

While the Senior counsel did argue on the merits to some extent, the court opines that considering the disputed facts or merits at this juncture is unnecessary since the challenge primarily concerns the issuance of the summons under the Act. The summons indicates that an inquiry is being conducted into the petitioner’s company, M/s. KPN Travels India Limited & Others, under the Central Goods and Services Tax Act, 2017, requiring the petitioner to provide evidence or produce documents within their possession or control.

In light of the nature of the summon, the court holds that authorities need not be needlessly restrained from conducting investigations or proceedings under the statute. It is viewed as an opportunity for the petitioner to submit relevant documents and statements. Entertaining a writ petition at this early stage could potentially disrupt the ongoing proceedings, which is deemed undesirable. Therefore, the court suggests that the petitioner’s challenge to the summons might impede the process unnecessarily, indicating a preference for allowing the investigation to proceed unimpeded.

The situation revolves around a writ petition challenging the legality of summons issued by a Senior Intelligence Officer under Section 70 of the Central Goods and Services Tax Act, 2017 (referred to as ‘the Act’). The key argument presented by the petitioner’s counsel is grounded in Section 6(2)(b) of the Act, which stipulates that if proceedings have been initiated by a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act on a particular subject matter, no parallel proceedings can be initiated under the Central Goods and Services Tax Act on the same subject matter.

The petitioner’s counsel contends that since the state authorities have already initiated proceedings against the petitioner regarding discrepancies in their return, the central authorities are obligated to await the conclusion of these proceedings before taking any action. Therefore, the summons issued by the respondent lacks jurisdiction.

Although the petitioner’s counsel briefly discussed the merits, the court believes that it is unnecessary to delve into disputed facts or merits at this stage, given that the challenge is primarily against the issuance of the summons itself. The summons indicates that the respondent is conducting an inquiry into the petitioner’s company under the Central Goods and Services Tax Act, 2017, and requests the production of specific documents.

The court opines that such summonses provide an opportunity for the petitioner to present relevant documents and statements. Entertaining a writ petition at this early stage could disrupt the ongoing proceedings, which would be undesirable and defeat the purpose of the investigation. Therefore, the court deems it inappropriate to adjudicate on the merits, especially when the jurisdiction of the summons is under question.

The Senior Panel Counsel representing the respondent disputes the petitioner’s contentions, arguing that the petitioner has already filed multiple writ petitions, causing delays and hindrances to the investigation process. Allegations are made that the petitioner is not cooperating with the investigation concerning Integrated Goods and Services Tax (IGST). The respondent contends that the scrutiny proceedings initiated by the state and the summons issued by the central authorities under Section 70 of the Act regarding IGST are unrelated. According to the provisions, proceedings should only be suspended if the subject matter is the same, which, in this case, they argue, it is not.

The case under consideration involves a writ petition challenging summons issued by a Senior Intelligence Officer under Section 70 of the Central Goods and Services Tax Act, 2017 (‘the Act’). The crux of the matter is whether proceedings initiated by state authorities on the same subject matter prohibit proceedings by central authorities under the Act, as per Section 6(2)(b) of the Act.

The petitioner’s counsel argues that since state authorities had already initiated proceedings regarding discrepancies in the petitioner’s return, the central authorities should wait until those proceedings conclude. Therefore, the summons issued by the respondent lacks jurisdiction. The court acknowledges this argument, stating that it need not delve into the merits of the case at this stage, as the very issuance of the summons is under challenge.

The summons requires the petitioner to provide evidence or documents related to their company, M/s. KPN Travels India Limited, under the Central Goods and Services Tax Act, 2017. The court opines that such summonses provide an opportunity for the petitioner to present their documents and statements and that interfering with the investigation at this stage would hamper the process.

The respondent’s counsel counters the petitioner’s argument, claiming that the petitioner has a history of challenging summons through multiple writ petitions, thus obstructing the investigation process. They assert that the state’s scrutiny proceedings and the central summons are unrelated, and unless the subject matter is the same, proceedings need not be kept in abeyance.

The petitioner’s counsel rebuts by mentioning that a previous summons had been put on hold in a previous writ petition. However, the respondent’s counsel points out that the petitioner habitually files writ petitions challenging every summon, thereby prolonging the investigation.

The court observes that the petitioner’s frequent recourse to writ petitions indicates an attempt to delay proceedings rather than cooperating with authorities by providing necessary documents and evidence. Consequently, the court disapproves of this behavior, emphasizing that repeatedly challenging summons and proceedings disrupts the investigative process.

In conclusion, the court declines to intervene at this stage, emphasizing that the competent authorities should handle the investigation based on available records, documents, and evidence. The petitioner’s strategy of filing successive writ petitions to challenge summons and proceedings is not viewed favorably by the court, as it hampers the investigative process rather than assisting in the defense of the petitioner’s case.

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