Order by State GST Authority quashed; no coercive action till proceedings pending by DGGI

Case details:  Anurag Suri v. Director General of Goods and Services Tax Intelligence - [2021] 128 taxmann.com 48 (Orissa)

Judiciary and Counsel Details

• • DR. S. Muralidhar, C.J.
  • B.P. Routray, J.
  • R.P. Kar, Adv. for the Petitioner.
  • R.S. Chimanka, Sr. Standing Counsel for the Respondent.

Facts of the Case

The Director General of Goods and Services Tax Intelligence (DGGSTI) conducted a search under section 67 upon petitioner and seized all documents. The summons were issued by DGGSTI and in meantime State GST Authority issued on petitioner a show cause notice under section 74 and asked him to pay a certain amount towards GST, interest and penalty.

The petitioner appeared before State GST Authority and submitted that since DGGSTI had seized all documents and issued summons pursuant to which he was appearing there from time to time, proceedings initiated should be kept in abeyance till such time of proceedings before DGGSTI concluded. Despite his request, State GST Authority passed an order under section 74(9) and raised demand upon him. It filed writ petition against the same.

High Court Held

The honorable High Court observed that the circular dated 5th October, 2018 precludes the State GST authorities from proceeding in the matter as long as the Central authorities are seized of the matter. Also, the circular states that if the officer of the Central tax authority initiates intelligence/enforcement action against a taxpayer, administratively assigned to a State tax authority, then the Central tax authority officers themselves have to further undertake the investigation and take the case to its logical conclusion and would not transfer the said case to its state tax counterpart. Therefore, the court directed the State GST Authority that till conclusion of proceeding initiated by DGGSTI, no coercive action be taken against petitioner and its order would be liable to be quashed.