DGGI Has No Power to Transfer Case Pending Before State GST Authority to Itself | HC

Case Details: Stalwart Alloys India Private Limited v. Union of India - [2024] 167 taxmann.com 93 (Punjab & Haryana)

Judiciary and Counsel Details

• Sanjeev Prakash Sharma & Sanjay Vashisth, JJ.
• Sandeep Goyal, Adv. for the Petitioner.
• R. Venkataraman, Assistant Solicitor General of India, Sourabh Goel, Sr. Standing Counsel, Ms Shivani Sahni, Ms Geetika Sharma, Ms Anju Bansal, Advs. & Ms Tanisha Peshawaria, Deputy Adv. General, for the Respondent.

Facts of the Case

The petitioner was a manufacturer of Lead alloys, Lead pure in shape of ingots, lead sub-oxide and red lead in power form and an enquiry was initiated by the State Tax Department with regard to wrongful availment of Input Tax Credit (ITC) against the petitioner. The DGGI, Headquarters had accorded permission to office of DGGI, Meerut Zonal Unit to conduct centralized investigation against petitioner for period after 2019 and State Tax Officer transferred proceedings. The petitioner filed writ petition against the transfer of proceedings to DGGI and contended that the action was in violation of provisions of Section 6(2)(b) of the Central Goods and Services Tax Act, 2017.

High Court Held

The Honorable High Court noted that the State and Central Government have same powers under CGST and if one of officers has already initiated proceedings, the same could not be transferred to another. In the instant case, the State authorities initiated proceedings for the period from 01.07.2017 to 22.07.2019 alone. However, the DGGI passed order to conduct investigation for period from July 2019 to March 2022.

But the word ‘subject matter’ used in Section 6 means ‘nature of proceedings’ and in present case, it meant proceedings initiated for wrongful availment of ITC by fraudulent means. Thus, if state had already initiated proceedings by issuing notice under Section 74 for same subject matter, DGGI could not be allowed to initiate from 28.07.2019 to 20.01.2022. Therefore, the Court held that the action of transferring proceedings to DGGI was not sustainable in law and liable to be set aside.