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Mere pendency of proceedings before the State authorities is not a ground to restrain the Central authorities from issuing summons and conduct investigation regarding certain allegations. This was decreed by the Hon’ble Justice S. M. Subramaniam in the case of Kuppan Gounder P.G. Natarajan Vs. Directorate General of GST Intelligence [W.P.No.15708 of 2021 and W.M.P.Nos.16604 & 16605 of 2021] on the 29^th of July 2021, before the Hon’ble High Court of Madras.

The present case in hand deals with a writ petition filed challenging summons issued by the Senior Intelligence officer/respondent under Section 70 of the Central Goods and Services Tax Act, 2017. The impugned summon states that the respondent is making an enquiry in connection with the petitioner’s company M/s.KPN Travels India Limited & Others under the Central Goods and Services Tax Act, 2017. The petitioner was directed to give evidences or produce documents or things of the following description in his possession or under his control. The question filed in the present writ is under Section 6(2) (b) of the CGST act. The petitioner is of the opinion that notice for intimating discrepancies in the return after some scrutiny, was issued by the State authorities to the petitioner on 17.12.2020 and the proceedings are in progress. While so, Central authorities are bound to wait till the conclusion of the proceedings initiated by the State officials under the State Goods and Services Tax Act and thus, the summons issued by the respondent is without jurisdiction.

The counsel for the respondent submits that the writ petitioner has already filed four writ petitions and stalling entire investigation process by one way or other and he is not co-operating for the continuance and completion of the investigation process in respect of IGST. It is contended that the State action regarding the scrutiny proceedings of the return filed by the petitioner and the impugned summons are issued by the Central authorities under Section 70 of the Act regarding IGST. Therefore, these two are unconnected and as per the provisions, if the subject matter is one and the same, then alone, the proceedings needs to be kept in abeyance and not otherwise. It was also submitted that the petitioner is having the habit of filing writ petition after writ petition, challenging every summon issued by the respondent and prolonging and protracting the investigation. The learned Senior counsel for the petitioner made a submission that earlier summon issued by the respondent has been kept in abeyance in W.P.No.2723 of 2021.

The court heard both the parties and observed that the petitioner is attempting to prolong the proceedings, instead of defending his case by producing documents and evidences and established his case or otherwise. Thus, such a conduct of filing writ petition after writ petition, challenging the summons and proceedings intermittently cannot be appreciated by the court. The court analysed section 6 (2) (b) which states that, “where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter”. As far as the present summon is concerned, there

was an order of seizure and earlier also, a summon was issued under Section 70 of the Act on 20.01.2021 and subsequently also, summons were issued and the investigations are in progress. The very purpose and object of Section 6(2) (b) of the Act is to ensure that on the same subject, the parallel proceedings are to be avoided. Once on a particular subject, the State authority has initiated action under the State Goods and Services Tax Act, then alone, the proper answer under the Central Goods and Services Tax Act are restrained to wait till the finalization of the proceedings initiated by the State authorities. The court dismissed the petition by decreeing, “It is to be established that subject matter is one and the same. Mere pendency of proceedings before the State authorities is not a ground to restrain the Central authorities from issuing summons and conduct investigation regarding certain allegations. Therefore, all these factors require an adjudication before the competent authority and if the summons are kept in abeyance at this stage, the same would paralyze the entire proceedings, which is not only desirable, but would cause prejudice to the interest of the Revenue in the present case.”

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