Case Reference
M/s Garg Sons Estate Promoters Pvt. Ltd. v. Commissioner of State Taxes & Excise and Others
High Court of Himachal Pradesh
CWP No. 804 of 2024
Category of Dispute: Parallel proceedings / GST demand under Section 74
Date of Judgment: 23.01.2024
Relevant Provisions: Section 70, Section 74(1), Section 74(9) of CGST/HPGST Act, 2017
Facts (Paras 2–10)
The petitioner, M/s Garg Sons Estate Promoters Pvt. Ltd., received supplies from M/s R.J. Trading between 01.01.2021 to 30.06.2021. Respondent No.2 issued summons under Section 70 of HPGST/CGST Act on 03.07.2021. The petitioner responded on 21.10.2021. Later, a show cause notice under Section 74(1) was issued on 12.01.2023, culminating in a demand order dated 20.05.2023 (Annexure P-10) under Section 74(9) imposing GST, interest, and penalty.
Simultaneously, the Central GST authorities had also issued summons dated 12.08.2021 under Section 70 covering a broader period 01.07.2017 to 30.06.2021. After proceedings, by order dated 21.12.2023 (Annexure P-12), GST liability of ₹2,52,49,764/- was determined and deposited by the petitioner. The central proceedings were closed accordingly.
Questions before Court
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Whether the petitioner can be subjected to duplicate tax proceedings by both Central and State authorities for the same supplies received from M/s R.J. Trading?
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Whether the State demand order dated 20.05.2023 is sustainable when liability had already been settled with the Central authorities?
Court’s Observations (Paras 11–15)
The Court noted that the same transactions with M/s R.J. Trading were already scrutinized by Central GST authorities, who raised liability, which was duly discharged. The proceedings were then closed. Despite this, the State authorities sought to impose a further demand for the same set of dealings, creating a duplication of liability.
The Court held that such duplication would cause grave irreparable loss to the petitioner, which cannot be compensated monetarily. A prima facie case existed in favour of the petitioner, and balance of convenience also lay with them.
Judgment (Para 16)
The impugned order dated 20.05.2023 (Annexure P-10) was stayed till further orders, restraining the respondents from giving effect to it.
Table of Cases Referred
| Case | Court | Verdict | Relevance |
|---|---|---|---|
| Present case only | Himachal Pradesh High Court | State demand stayed due to duplication with Central proceedings | Establishes protection from double jeopardy under GST when liability already settled |
Between Fine Lines
For businesses, this ruling reinforces that GST liability cannot be imposed twice by different authorities for the same transaction. Once the liability has been assessed and settled with one authority (Central or State), parallel proceedings on identical facts are unsustainable. This provides a safeguard against harassment and ensures certainty in tax compliance.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
