Once the proceedings has been initiated by the SGST authorities by the Show Cause Notice, the CGST authorities could not have issued a Show Cause Notice

Case Title: Rajesh Mittal v. Union of India

Court: High Court of Gauhati

Petition No.: WP(C) No. 371 of 2024

Date of Judgement: 25 January 2024

Relevant Section: Section 16(4), Section 6(2)(b) of the CGST Act, 2017

Category of Dispute: Input Tax Credit (ITC)

Facts of the Case [¶2]:

• The petitioner, Rajesh Mittal, a registered person under CGST/SGST, was issued a notice (GST DRC-01A dated 29.11.2023) alleging wrongful availment of ITC worth ₹1,46,41,235/- for the period June 2018 to March 2019.
• A Show Cause Notice (SCN) was then issued by SGST authorities on 01.12.2023 for the same violation under Section 16(4) CGST/SGST Act.
• The petitioner replied to the SCN on 30.12.2023 (uploaded on 31.12.2023).
• While the SGST SCN proceedings were pending, another SCN dated 27.12.2023 was issued by CGST authorities for the same alleged violation and ITC amount.

Questions in Consideration [¶3]:

• Whether issuance of a second Show Cause Notice by CGST authorities on the same subject matter is valid when the SGST authorities have already initiated proceedings?
• Whether such action violates Section 6(2)(b) of the CGST Act, 2017, which deals with proper officer jurisdiction between CGST and SGST authorities?

Observations of the Court [¶6]:

• The Court noted that two SCNs had been issued—one by SGST (01.12.2023) and one by CGST (27.12.2023)—both on the same subject matter.
• As per Section 6(2)(b) of the CGST Act, once proceedings are initiated by either CGST or SGST authorities, the other should not proceed on the same matter.
• The CGST authority is directed not to proceed further under the SCN dated 27.12.2023 until the next date of hearing (07.02.2024).

Judgement of the Court [¶6]:

• The High Court ordered that the CGST authorities shall not proceed further in terms of their SCN dated 27.12.2023 in view of the provisions under Section 6(2)(b) until the matter is heard next on 07.02.2024.

Between Fine Lines:

• A taxpayer cannot be subjected to multiple proceedings by both CGST and SGST for the same issue.
• Section 6(2)(b) ensures jurisdictional clarity to avoid parallel actions.
• The Gauhati High Court gave interim relief by restraining CGST from acting on their second SCN.
• The case underscores the importance of administrative coordination between tax wings.
• The matter remains sub judice pending final directions.

Summary of Referred Cases