Shafi Khan Khokhar VS The State of Maharastra

This petition has been filed under Article 226 of the Constitution of India, challenging an enquiry initiated by the Superintendent of CGST & Central Excise (AE), Mumbai, referred to as respondent No. 2. The enquiry began with the issuance of summons to the petitioner on September 28, 2018, under Section 14 of the Central Excise Act, 1944, and Section 70 of the Central Goods & Services Tax (CGST) Act, 2017.

The petitioner argues that he is already undergoing an enquiry by the CGST Authorities, raising the concern that the current enquiry initiated by respondent No. 2 may be unnecessary or duplicative. This legal challenge seeks to address the issues surrounding the summons and the ongoing investigation process under the mentioned statutory provisions. The petitioner is likely seeking relief from the court on the grounds that the simultaneous enquiries by different authorities could lead to harassment or unnecessary complications, and may not be in accordance with the law.

In such cases, the court typically examines whether the initiation of multiple enquiries by different authorities is legally justified, whether the statutory provisions have been correctly applied, and whether the petitioner’s rights under the law are being respected. The outcome of the petition could have implications for how similar cases are handled in the future, particularly in terms of the application of the Central Excise Act and the CGST Act in cases involving overlapping jurisdiction or multiple investigations.

This petition, filed under Article 226 of the Constitution of India, challenges an enquiry initiated by the Superintendent of CGST & Central Excise (AE) Mumbai (Respondent No. 2). The enquiry was initiated by issuing summons to the petitioner on September 28, 2018, under Section 14 of the Central Excise Act, 1944, and Section 70 of the Central Goods & Services Tax Act, 2017.

The petitioner contends that he is already under an ongoing enquiry by CGST authorities in Jaipur, which had issued a summons to him on September 7, 2017. Therefore, he argues that having two parallel proceedings or enquiries on the same subject by different authorities is beyond jurisdiction. As such, he requests that the enquiry initiated by Respondent No. 2 in Mumbai, which was initiated later, be quashed.

In response, Mr. Jetly, counsel for Respondents Nos. 2 and 3, argues that the petitioner has already responded to the summons issued on September 28, 2018, and has even made a statement before the authorities on January 18, 2018. Hence, he contends that the petition does not warrant further consideration.

It is acknowledged that the petitioner has registered under the CGST Act, 2017, and the Finance Act, 1994 (service tax) in Mumbai. By virtue of this registration, the petitioner is subject to the jurisdiction of Mumbai authorities concerning business activities conducted within their jurisdiction. The petitioner claims that his primary business is in Jaipur, but this does not impact the determination of whether Respondent No. 2 has the jurisdiction to proceed with the enquiry.

This legal case revolves around a petition filed under Article 226 of the Constitution of India, wherein the petitioner challenges an inquiry initiated by the Superintendent of CGST & Central Excise (AE), Mumbai (referred to as Respondent No. 2). The inquiry was initiated through a summons issued on September 28, 2018, under Section 14 of the Central Excise Act, 1944, and Section 70 of the Central Goods & Services Tax (CGST) Act, 2017. The petitioner contends that this inquiry is without jurisdiction since he is already undergoing a similar inquiry by the CGST authorities in Jaipur, which began with a summons issued on September 7, 2017. Given that two parallel proceedings on the same subject matter cannot coexist, the petitioner seeks to quash the Mumbai inquiry, arguing that it is later in time and hence, should not proceed.

The respondent authorities, represented by Mr. Jetly, argue that the petitioner’s request to quash the Mumbai inquiry is unwarranted. They point out that the petitioner has already responded to the Mumbai summons and even made a statement before the authorities on January 18, 2018. This response indicates that the petitioner has recognized the jurisdiction of the Mumbai authorities and has participated in the proceedings. Therefore, the respondent contends that the petition should not be entertained by the court.

A critical aspect of this case lies in the legal provisions of the CGST Act, 2017, particularly Section 25, which mandates that businesses must obtain separate registrations for each state where they operate. The petitioner has registered under the CGST Act, 2017, and the Finance Act, 1994, in Mumbai, which covers service tax. By doing so, he has voluntarily subjected himself to the jurisdiction of the Mumbai authorities for any business activities carried out within their jurisdiction. Although the petitioner argues that his primary business is located in Jaipur, this does not override the requirement for compliance with the Mumbai jurisdiction, given that he has rendered services in Mumbai.

The court, upon reviewing the facts and legal arguments, concludes that the inquiry initiated by the Mumbai authorities is valid and within their jurisdiction. The court reasons that since the petitioner is registered in Mumbai and has conducted business there, he falls under the purview of the Mumbai CGST authorities. Consequently, the court finds no justification to interfere with or halt the investigation being conducted by Respondent No. 2 in Mumbai.

Accordingly, the court dismisses the petition. However, the court provides a concession regarding the documentation requested by the Mumbai authorities. If the petitioner has already submitted the original documents sought by the Mumbai authorities to the Jaipur authorities, he may produce certified copies of those documents to the Mumbai authorities as a satisfactory form of compliance. This ensures that the petitioner is not unduly burdened with duplicate submissions while still fulfilling the requirements of the ongoing investigation in Mumbai.

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