Case Title, Court & Statutory Matrix

Case: Amit Gupta v. Union of India & Ors.
Court: High Court of Delhi
Petition No.: W.P.(C) 8625/2022 & CM APPL. 25934/2022
Date of Judgment: 04.09.2023
Relevant Provisions: Section 6(2)(b), Section 67(2), Section 74 of the Central Goods and Services Tax Act, 2017.
Category: Parallel proceedings ― Jurisdiction ― Cross-empowerment ― Investigation consolidation.

Facts (with Para References)

The petitioner, a dealer engaged in trading agricultural and technical grade urea through two proprietary entities (M/s Shyam Trading Co. and M/s Garg Trading Co.) (para 14), alleged harassment due to dual investigations by (i) the jurisdictional CGST Commissionerate, Delhi North (Respondent No.3), and (ii) DGGI Gurugram (Respondent Nos.4 & 5).

The jurisdictional CGST Commissionerate initiated investigation first by issuing summons on 03.03.2022 and recorded the petitioner’s statement on 16.03.2022. During this process, it allegedly collected ₹50,12,000 under Section 74 without issuing any SCN (para 2).

Thereafter, DGGI conducted search operations on 18.04.2022 at the business premises, residence, and godown of the petitioner, sealing the premises and summoning more documents (para 3). Subsequent searches revealed unaccounted stock, which DGGI seized under Section 67(2) (paras 6–7).

The petitioner contended that DGGI could not proceed once the jurisdictional Commissionerate had initiated proceedings. He relied on Section 6(2)(b) and the CBIC Circular dated 05.10.2018 to argue that parallel or transferred proceedings were ultra vires (paras 12 & 19).

During hearings, the Court facilitated discussions between authorities, and both CGST Delhi North and DGGI agreed to club the proceedings so that only one agency would continue. The petitioner then objected to DGGI taking over, insisting that jurisdiction remained with the first-initiating officer (paras 10–12).

Questions for Determination

1. Whether DGGI was barred under Section 6(2)(b) from conducting or continuing investigation merely because CGST Delhi North had initiated earlier proceedings on a related subject matter? (para 13)

2. Whether Section 6(2)(b) or the CBIC Circular dated 05.10.2018 prohibits the transfer or consolidation of investigations between properly empowered authorities? (paras 19 & 31)

Court’s Observations (with Para References)

The Court held that the statutory scheme of Section 6 is intended to avoid multiplicity and not to prohibit consolidation of proceedings. Section 6(2)(b) requires that officers do not initiate fresh proceedings on the same subject matter, but it does not bar transferring an ongoing investigation to one competent authority (paras 29–30).

The Circular dated 05.10.2018 only deals with administrative assignment between Centre and State and empowers the officer initiating intelligence-based enforcement to take it to its logical conclusion; it does not bar consolidation when investigations overlap or become intertwined (paras 31–34).

The Court emphasised that fragmented investigations into related issues — diversion of agricultural urea (DGGI) and wrongful ITC availment (jurisdictional Commissionerate) — would artificially silo matters and could lead to duplication, conflict, or parallel proceedings (paras 35–37). Consolidation actually furthers the object of Section 6(2)(b) by preventing harassment and inconsistent outcomes.

The Court relied on Indo International Tobacco Ltd. v. Vivek Prasad (2022 SCC OnLine Del 90), which clarified that Section 6 and the Circular cannot be given an “overarching” meaning and do not restrict consolidation where multiple agencies have overlapping jurisdiction (paras 38 and extracted paras 65–67).

Judgment (with Para References)

The Court rejected the petitioner’s contention that DGGI lacked jurisdiction due to Section 6(2)(b). It held that transfer of investigations is lawful, consolidation is permissible, and such consolidation prevents parallel proceedings and advances the statutory purpose (paras 29–37).

Since both authorities had mutually agreed that DGGI would conduct the consolidated investigation, and both had jurisdiction, the petitioner could not insist that only the first-initiating officer continue (para 39).

The writ petition was accordingly disposed of, with pending applications closed (para 40).

Table of Cases Referred

Between Fine Lines (Trade / Industry Takeaway)

This decision clarifies that when multiple GST agencies investigate overlapping issues—e.g., ITC fraud, fake invoices, diversion of goods—Section 6(2)(b) does not prohibit consolidation. Instead, consolidation is desirable to prevent conflicting proceedings, repetitive summons, and taxpayer harassment. Businesses facing parallel queries from different wings (CGST, SGST, DGGI, Audit Commissionerates) can legitimately seek consolidation before a single authority, provided both agencies have jurisdiction.

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.”