Proceedings initiated by DGGI on same proceedings which were initiated by state authority are not hit by Section 6(2)(b) of the CGST Act, 2017

Case Title: Rais Khan v. Addl. Commissioner, Enforcement Wing-II, Rajasthan

Court: High Court of Rajasthan

Petition Number: D.B. Civil Writ Petition No. 3087 of 2024

Category of Dispute: Power to Issue Summons / Jurisdictional Overlap

Date of Judgement: 14 March 2024

Relevant Section: Section 6(2)(b), Section 70 – CGST Act, 2017

Facts of the Case

1. The petitioner challenged the issuance of summons dated 27.09.2023 and 14.02.2024 by the Directorate General of GST Intelligence (DGGI) under Section 70 of the CGST Act, 2017
2. The petitioner contended that the proceedings were already initiated by State GST Authorities, and as per Section 6(2)(b) of CGST Act, parallel proceedings by DGGI (a Central authority) were not permitted on the same subject matter
3. The petitioner further invoked the binding nature of guidelines issued by GST Investigation Wing and cited precedents where courts restricted multiple proceedings by different authorities

Questions in Consideration

• Whether issuance of summons under Section 70 of CGST Act by DGGI is barred under Section 6(2)(b) when proceedings have already been initiated by the State GST authorities?

Observations of the Court

1. The Court distinguished between “inquiry” under Section 70 and “proceedings” under Section 6(2)(b), holding that issuance of summons is not equivalent to initiating proceedings.
2. The Court referred to decisions including G.K. Trading Co. and Kuppan Gounder P.G. Natarajan, affirming that issuance of summons for inquiry is permissible and not in violation of Section 6(2)(b)
3. The Court noted that in Vivek Narsaria and R.P. Buildcon, the decisions were context-specific, and those cases did not prohibit Central authorities from issuing summons for inquiry when State action was underway

Judgement of the Court

The Rajasthan High Court held that issuance of summons under Section 70 is not barred by Section 6(2)(b) of the CGST Act. It dismissed the writ petition as devoid of merit and disposed of the stay application accordingly.

Between Fine Lines

• The Court clarified that a summons under Section 70 is part of an inquiry and not an initiation of proceedings.
• Section 6(2)(b) deals with avoiding duplication of “proceedings”, not “inquiries”.
• Authorities from Centre and State can conduct inquiries separately unless full-fledged proceedings overlap.
• Reliance solely on the initiation by State GST does not bar the DGGI from invoking Section 70.
• The petition was rejected as the legal interpretation of “proceedings” did not support the petitioner’s claims.

Summary of Referred Cases