Tag: CGST Vs. SGST

Counterpart Department cannot initiate proceedings where one Department is assigned to the assessee

In the case of:

Ram Agencies Vs. Assistant Commissioner of Central Tax, 

W.P. (MD) No. 8674 of 2024,

[2024] 162 taxmann.com 240 (Madras),

Hon’ble High Court of Madras has held that when an assessee has been allocated either to Central Tax Authorities or State Tax Authorities, considering the decision on the case of Tvl Vardhan Infrastructure Vs. The Special Secretary, [2024] 160 taxmann.com 771 (Madras), in the absence of notification for cross empowerment, the Authorities from the counterpart Department cannot initiate proceedings, i.e., where the assessee is assigned to CGST Authorities, then SGST authorities cannot initiate proceedings and vice versa.

In the above decision of Tvl.Vardhan Infrastructure v. The Special Secretary, [2024] 160 taxmann.com 771 (Madras), it was observed that:

  1. We need to take note of whether the State tax authorities and the Central tax authorities enjoy concurrent jurisdiction, the issue of cross-empowerment of the State tax authorities and the Central tax authorities. 
  2. GST Council, in its meeting held during January 2017, has decided that both the Central and State tax administrations have the power to take intelligence-based enforcement action in respect of the entire value chain.
  3. Based on such decision of the GST Council, the CBEC issued clarification dated 05.10.2018. It is clear from the said clarification that if an intelligence-based enforcement action is taken against a taxpayer, which is assigned to State tax authority, the Central tax authority is entitled to proceed with the matter and take it to the logical conclusions and the same principle is applicable vice versa.

Note 1 – Section 6(2)(b) of CGST Act:

Provisions of Section 6(2)(b) of CGST Act are relevant in this regard, which provide that:

If a Proper officer under SGST/UTGST Acts has initiated a proceeding on a subject matter, then no proceedings shall be initiated by Proper officer under CGST Act on the same subject matter.

Note 2 – Circular dated 05.10.2018:

The Circular as referred to above, i.e., Circular No. 68/42/2018-GST dated 05.10.2018 states at Para 4 that (Relevant for Cross-empowerment):

Notification No. 16/2017 – Central Tax (Rate) dated 28.06.2017 shall be applicable for the purpose of Refund of Compensation Cess to UN and specified international organizations, foreign diplomatic missions or consular posts in India or diplomatic agents or career consular offices posted therein.

Where proceedings are pending under SGST, CGST authorities cannot proceed with a Notice

Citation:

Rajesh Mittal Vs. Union of India – WP(C) No. 371 of 2024

High Court of Gujarat

[2024] 160 taxmann.com 49 (Gauhati)

Facts:

  1. Notice was issued in Form GST DRC-01A dated 29.11.2023 to the petitioner by SGST Authorities, alleging violation of Section 16(4) of the CGST Act – Input Tax Credit taken after the due date, i.e., 30th November (Due date for GSTR-3B for the month of September, prior to 1st October 2022)
  2. This was followed by Show Cause Notice dated 01.12.2023, to which the petitioner uploaded a reply on 31.12.2023.
  3. During these proceedings with SGST Authorities, another Show Cause Notice dated 27.12.2023 was issued by CGST Authorities on the same issue – alleged violation of Section 16(4) of the Act, for the same amount.

Arguments:

  1. The petitioner has submitted that Issue of SCN dated 27.12.2023 by CGST authorities during the pendency of SCN dated 01.12.2023 by SGST authorities is in violation of Section 6(2)(b) of CGST Act – Link Below contains Article on Section 6.
  2. Department has sought time to obtain instructions in this matter, since the petitioner has filed a representation before the CGST authorities.
  3. Department has also sought for listing on 07.02.2024.

Decision of the High Court:

  1. The Case is listed on 07.02.2024.
  2. Until the next date of listing, CGST authorities shall not proceed further in terms of SCN dated 27.12.2023.