State GST Authority Can’t Prosecute If the Central Authority Has Already Initiated Action: Madras High Court.
The Madras HC on Date: 6th February 2023 has held that the State Authority cannot prosecute the petitioner once again as the Central Authority has already initiated action against the petitioner in respect of the very same subject matter. This was seen in the matter of Tvl Metal Trade Incorporation Versus The Special Secretary W.P.No.3033 of 2023 & W.M.P.No.3125 of 2023 the matter was presided over by the The Hon’ble Mr. Justice Abdul Quddhose.
FACTS OF THE CASE
The bench of Justice Abdul Quddhose has observed that the petitioner will have to participate in the personal hearing & state all his objections with regard to the action launched by the State Authority under the TNGST Act, 2017. Unless & until the petitioner participates in the impugned proceedings, viz., the summons dated October 18, 2022, the truth cannot be unearthed with regard to the petitioner’s contentions.
The petitioner/assessee has challenged the summons on the ground that both the central & state authorities do not have the power to initiate proceedings against the petitioner simultaneously under the respective GST Acts with regard to the same subject matter.
The petitioner contended that he is already facing proceedings initiated by the Central Authority and, therefore, the question of the State Authority initiating proceedings against the petitioner will not arise as per Section 6(2)(b) of the GST Act, 2017.
The petitioner has also submitted a reply to the summons issued by the State Authority on October 27, 2012. However, the State Authority apprehends that even without communicating the outcome of the decision taken by the State Authority pursuant to the reply dated 27.10.2022, the respondents were, on a day-to-day basis, threatening the petitioner, & they have been calling upon the petitioner to come for a personal hearing.
The court noted that no final decision has been taken by the State Authority to initiate action against the petitioner under the TNGST Act, 2017. The petitioner has only been called upon to produce documents under the impugned summons dated October 18, 2022, & he has also been called to come for a personal hearing. The petitioner has not participated in the personal hearing, & instead, he has chosen to file this Writ Petition, challenging the summons.
JUDGEMENT
The court held that to substantiate his defense that he cannot be once again prosecuted by the State Authority under the TNGST Act, 2017, he has to participate in the inquiry to be conducted by the State Authority, & only then can it be ascertained whether the proceedings initiated by the Central & State Authorities are one & the same & involve the same subject matter.
“Truth will come out only when the petitioner appears before the respondent pursuant to the summons received by him & not otherwise. If it is the same subject matter, the state authority cannot prosecute the petitioner once again as the central authority has already initiated action against the petitioner in respect of the very same subject matter,” the court said.
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JUDGEMENT REVIEWED BY YAKSHU JINDAL.