Sureshbhai Gadhecha Proprietor of  Anmol Traders VS State of Gujarat

Mr. S.N. Soparkar, Senior Advocate, along with Ms. Niyati Shah, representing the petitioner, directed the court’s attention to sections 5 and 6 of the Gujarat Goods and Services Tax Act, 2017. They emphasized clause (b) of sub-section (2) of section 6, which stipulates that once a proper officer under the Central Goods and Services Tax Act, 2017 (CGST Act), initiates any proceedings on a particular subject matter, no other proper officer under the Gujarat Goods and Services Tax Act (GGST Act) can commence proceedings on the same subject. This provision ensures that there is no overlap or duplication of proceedings between the CGST and GGST Acts.

Mr. Soparkar and Ms. Shah also referenced section 6 of the CGST Act, noting that it contains a similarly worded clause (b) in sub-section (2). This clause serves the same purpose as its counterpart in the GGST Act, preventing the initiation of parallel proceedings on the same subject matter by different proper officers under the CGST Act once proceedings have been started by a proper officer under the GGST Act.

Their argument highlighted the legislative intent to avoid concurrent jurisdiction and conflicting decisions between the central and state GST authorities. By pointing out these provisions, the counsel aimed to reinforce the need for a clear demarcation of authority and the avoidance of duplicative or redundant legal actions, thereby ensuring procedural efficiency and legal clarity in the administration of GST laws.

In this case, Mr. S.N. Soparkar, Senior Advocate, along with Ms. Niyati Shah, advocate for the petitioner, brought the court’s attention to the provisions of sections 5 and 6 of the Gujarat Goods and Services Tax Act, 2017 (GGST Act). They highlighted clause (b) of sub-section (2) of section 6 of the GGST Act, which stipulates that if a proper officer under the Central Goods and Services Tax Act (CGST Act) has initiated proceedings on a particular subject matter, no proceedings shall be initiated by the proper officer under the GGST Act on the same subject matter. This clause is mirrored in section 6 of the CGST Act, which also specifies that if a proper officer under the State Goods and Services Tax Act (SGST Act) or the Union Territory Goods and Services Tax Act (UTGST Act) has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under the CGST Act on the same subject matter. This argument was used to emphasize the non-duplication of proceedings under different tax statutes concerning the same subject matter.

Mr. S.N. Soparkar, Senior Advocate, along with Ms. Niyati Shah, representing the petitioner, drew the court’s attention to sections 5 and 6 of the Gujarat Goods and Services Tax Act, 2017 (the GGST Act). They specifically highlighted clause (b) of sub-section (2) of section 6, which stipulates that if a proper officer under the Central Goods and Services Tax Act (the CGST Act) initiates any proceedings on a particular subject matter, no proceedings can be initiated by a proper officer under the GGST Act on the same subject matter. This provision ensures that dual proceedings are avoided.

The counsel referenced section 6 of the CGST Act to emphasize that it contains a similarly worded clause, ensuring that once a proper officer under the State Goods and Services Tax Act (SGST Act) or the Union Territory Goods and Services Tax Act (UTGST Act) has initiated proceedings on a particular subject matter, no further proceedings can be initiated by a proper officer under the CGST Act on the same subject matter. This alignment between the CGST Act and the GGST Act prevents overlapping jurisdiction and duplicate proceedings.

Additionally, the counsel referred to the D.O.F. No.CBEC/20/43/01/2017-GST (Pt.) dated October 5, 2018, issued by the Central Board of Indirect Taxes and Customs (CBIC). This document clarifies that if an officer of the Central tax authority initiates an intelligence-based enforcement action against a taxpayer administratively assigned to the State tax authority, the case will not be transferred to the State tax counterpart. Instead, the Central tax authority’s officers will handle the case to its logical conclusion. This directive further underscores the separation of jurisdiction and enforcement between Central and State tax authorities.

In the context of the present case, the counsel pointed out that the investigation had already been initiated by officers under the CGST Act. This invocation of jurisdiction by the CGST authorities indicates that no parallel proceedings should be initiated under the GGST Act, adhering to the principles laid out in the relevant sections of both the GGST and CGST Acts and the directive issued by the CBIC.

Mr. S.N. Soparkar, Senior Advocate, along with Ms. Niyati Shah, learned advocate for the petitioner, directed the court’s attention to sections 5 and 6 of the Gujarat Goods and Services Tax Act, 2017. They specifically referred to clause (b) of sub-section (2) of section 6, which stipulates that if a proper officer under the Central Goods and Services Tax Act (CGST Act) has initiated proceedings on a particular subject matter, no proceedings on the same subject matter can be initiated by a proper officer under the Gujarat Goods and Services Tax Act.

Similarly, reference was made to section 6 of the CGST Act, which mirrors the provision in the Gujarat Goods and Services Tax Act. Clause (b) of sub-section (2) in the CGST Act states that if a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated proceedings on a subject matter, no proceedings can be initiated by a proper officer under the CGST Act on the same subject matter.

The advocates also cited D.O.F. No.CBEC/20/43/01/2017-GST (Pt.) dated October 5, 2018, issued by the Central Board of Indirect Taxes and Customs. This document clarifies that if an officer from the Central tax authority begins an intelligence-based enforcement action against a taxpayer administratively assigned to the State tax authority, the Central tax officers should not transfer the case to the State tax authority but should themselves carry the case to its logical conclusion.

In the context of the present case, it was highlighted that the investigation had been initiated by officers under the CGST Act. Despite this, the authorities under the SGST Act issued summons to the petitioner under section 70(1) of the Goods and Services Tax Acts on August 29, 2019, followed by another summons on December 5, 2019. During the petitioner’s statement recorded by the State authorities, question No.6 inquired about the status of the search conducted at the petitioner’s business premises by the CGST Department. The subsequent question asked which books of accounts had been seized by the CGST Department. The petitioner responded that all account books and business records had been seized by the CGST Department. Therefore, it was submitted that the SGST authorities were well aware of the ongoing proceedings under the CGST Act.

Mr. S.N. Soparkar, Senior Advocate, along with Ms. Niyati Shah, representing the petitioner, directed the court’s attention to Sections 5 and 6 of the Gujarat Goods and Services Tax Act, 2017. They highlighted clause (b) of sub-section (2) of Section 6, which stipulates that if a proper officer under the Central Goods and Services Tax (CGST) Act initiates any proceedings on a subject matter, no proceedings should be initiated by a proper officer under the State Act on the same subject matter. This clause is similarly worded in Section 6 of the CGST Act.

The advocates referred to the directive D.O.F. No.CBEC/20/43/01/2017-GST (Pt.) dated October 5, 2018, issued by the Central Board of Indirect Taxes and Customs. This directive clarifies that if the Central tax authority initiates enforcement action based on intelligence against a taxpayer assigned to the State tax authority, the Central tax authority officers will handle the case to its conclusion and not transfer it to the State tax counterpart.

In the current case, the investigation commenced under the CGST Act. The authorities under the SGST Act issued summons to the petitioner on August 29, 2019, and December 5, 2019. During the statement recorded by the State authorities, the petitioner was questioned about the search carried out at their business premises by the CGST Department and which books of accounts were seized. The petitioner responded that all account books and records were seized by the CGST Department, indicating that the SGST authorities were aware of the ongoing CGST investigation. The counsel argued that two parallel investigations under the State Act and the Central Act are not permissible.

Given these submissions, the court issued a notice returnable on January 23, 2020. As an ad-interim relief, the respondents were restrained from taking any coercive action against the petitioner pursuant to the impugned inquiry proceedings.

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