Both Central and state cannot initiate proceeding against petitioner on same matter: HC

No fresh proceedings can be initiated against petitioner by state on same matter on which Central Authority has already initiated action.

The petitioner has challenged the impugned show cause notice in Form GST DRC-01 (Ref. No.ZD331022029519P) dated 21.10.2022 on the ground that the same has been issued in violation of Section 6(2)(b) of the TNGST Act, 2017.

According to the petitioner, a similar show cause notice was issued by the Central Authority under CGST Act, 2017 on 29.07.2022 against the petitioner, involving the very same defects and therefore, as per the provisions of Section 6(2)(b) of the Tamil Nadu Goods and Service Tax Act, 2017 when the proper officer under the CGST Act has already initiated any proceedings against the petitioner on the very same subject matter, no proceedings shall be initiated by the proper officer under the provisions of the TNGST Act, 2017.

Contention of Department

Learned Government Advocate appearing for the Assistant Commissioner (State Taxes) has placed before this Court the written instructions received by her from the Office of the Assistant Commissioner (ST), Nungambakkam Assessment Circle, Chennai – 600 031 dated 28.01.2023. As per the written instructions a detailed reply has not been sent by the petitioner to the impugned show cause notice. In the written instructions, it is also stated that if the petitioner submits the same then accordingly those similar defects for which notice has been issued by the Central Authority will be omitted and action shall be initiated in respect of the balance defects alone.

The respondents have also stated in their written instructions that once a detailed reply is sent by the petitioner stating their objections with regard to the impugned show cause notice, the same will be considered by them on merits. They have also categorically stated in their written instructions that if the defects are similar to the one mentioned in the show cause notice issued by the Central Authority, the said defects will be omitted and no proceedings will be initiated against the petitioner with regard to the defects which are already the subject matter of consideration by the Central Authority.

Contention of Petitioner

Learned counsel for the petitioner would however submit that the defects pointed out in the show cause notice issued by the Central Authority and the defects pointed out under the impugned show cause notice by the State Authority are one and the same and therefore, as per the provisions of Section 6(2)(b) of the TNGST Act, 2017, no fresh proceedings can be initiated against the petitioner under the said Act with regard to the very same subject matter.

Views of Court:

8. While that be so, this Court is of the considered view that necessarily the petitioner will have to submit a detailed reply to the impugned show cause notice to the respondents to enable the respondents to consider the petitioner’s grievance that no fresh proceedings can be initiated against them under the TNGST Act, 2017, in view of the fact that the Central Authority has already initiated action against the petitioner for the very same subject matter under the show cause notices dated 29.07.2022 and 31.12.2022. When the respondents have undertaken before this Court that they shall consider the grievance of the petitioner as raised in this Writ Petition, the question of entertaining this Writ Petition at this stage and granting relief to the petitioner will not arise.

9. The only limited relief that can be granted to the petitioner is to permit them to file a detailed reply to the impugned show cause notice, stating all their objections that have been raised in this Writ Petition including the objection with regard to Section 6(2)(b) of the TNGST Act, 2017 and on receipt of the said reply, a direction can be issued to the respondents to consider the said reply on merits and in accordance with law within a time frame to be fixed by this Court.