Seaquest Trading PVT LTD. vs. Union Of INDIA And Ors
Original PDF →Facts
The petitioner, Seaquest Trading Pvt. Ltd., a trading company incorporated on November 5, 2024, filed a writ petition seeking to declare the action of respondent no.4 (Superintendent, Anti Evasion, CGST & Central Excise, Thane Rural Division) in blocking its Electronic Credit Ledger under Rule 86A of the CGST Rules, 2017, as illegal and without jurisdiction. The petitioner also sought a declaration that the reinvestigation by respondent no.4 would be barred by res-judicata and requested the quashing of all proceedings initiated by respondent no.4. A summons dated October 31, 2025, issued under Section 70 of the CGST Act by respondent no.4 to a Director of the petitioner was placed on record. The petitioner claimed to have paid all taxes and uploaded all documents, and acknowledged an investigation by respondent no.4.
Held
The Court rejected the petitioner's contention that the action by the CGST officer was impermissible under clause (b) of sub-section (2) of Section 6 of the CGST Act. The Court found that this provision applies when the subject matter of both proceedings is the same, which was not the factual situation in this case. The Court noted that serious allegations of GST Act violations had led to the initiation of proceedings, including the arrest of a Director of M/s. Dawnak Enterprises LLP. The Director of the petitioner-company had been issued a summons and had obtained anticipatory bail. There was an allegation that the petitioner-company had availed input tax credit of up to Rs. 2.56 crores based on invoices without actual supply of goods or services. The Court emphasized that violations of the GST enactment challenge the country's financial stability and that a writ court should not exercise discretionary powers in favor of a violator based on a technical plea. The Court found no merit in the writ petition.
Key Issues
1. Whether the issuance of a summons under Section 70 of the CGST Act by the Superintendent, Anti Evasion, CGST & Central Excise, Thane Rural Division, is illegal and without jurisdiction, particularly when a similar investigation is allegedly being conducted by the Assistant Commissioner of State Tax, CST (Investigation-B), Mumbai? Petitioner's contention: The petitioner argued that two parallel proceedings cannot be instituted by both State and Central GST officers for the same matter. Reliance was placed on the Supreme Court judgment in "M/s. Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate & Anr." and clause (b) of sub-section (2) of Section 6 of the CGST Act to support the claim that the summons was illegal and without jurisdiction. Revenue/State's contention: The judgment does not explicitly record arguments from the revenue or state on this specific issue, other than the Court's analysis in its holding.
Sections Cited
Rule 86A, Section 70, Section 6(2)(b)
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURI ICTION WRIT PETITION NO.877 OF 2026 Seaquest Trading Pvt. Ltd., Kalyan (W), Thane ] Through its Director-Mr. Noorain Asif Downak ] .. Petitioner Versus
Union of India ]
State of Maharashtra ]
Assistant Commissioner State Tax, ] Investigation – B Mumbai ]
The Superintendent, Anti Evasion, ] CGST & Central Excise, ] Thane Rural Division, Mumbai ] .. Respondents Ms. Luccy Massey with Ms. Amita Canneil and Ms. Preeti Dubey, Advocates for the Petitioner. Mr. K.V. Saste, Additional Public Prosecutor for Respondent No.
CORAM : SHREE CHANDRASHEKHAR, CJ. & GAUTAM A. ANKHAD, J. DATE : 2ND APRIL 2026. P.C. : The petitioner-Company is seeking a declaration that the action of the respondent no.4 in blocking the petitioner-Company’s Electronic Credit Ledger under Rule 86A of the Central Goods and Services Tax Rules, 2017 is illegal, arbitrary and without juri iction. It is further seeking a declaration that the action taken by the respondent no.4 shall constitute res-judicata and it is not authorized to conduct re- investigation. In the background of the aforementioned prayers, the petitioner-Company is seeking quashing of all the proceedings initiated by the respondent no.4. 2. A photocopy of the summons dated 31st October 2025 issued under section 70 of the CGST Act by the Superintendent (Anti Evasion), CGST & Central Excise, Thane Rural Division to one of the Directors of the petitioner-Company is tendered in the Court.
Taken on record and reproduced below for ease of reference: 1/5 902-WP-877-2026.doc Dixit
2/5 902-WP-877-2026.doc Dixit
The petitioner-Company, which is represented through its Director, namely, Mr. Noorain Asif Downak states that it is a trading company which has received a Certificate of Incorporation on 5th November 2024. The petitioner-Company further claims that it has paid all taxes and uploaded all material documents on the GST portal. The petitioner-Company has the knowledge about investigation being conducted by the Superintendent, Anti Evasion, CGST & Central Excise, Thane Rural Division.
Ms. Luccy Massey, the learned counsel for the petitioner- Company refers to the judgment rendered by Hon’ble Supreme Court in “M/s. Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate & Anr.”1 to contend that two parallel proceedings cannot be instituted both by the State and Central GST officers. This is the stand put forth on behalf of the petitioner-Company that the summons issued under section 70 of the CGST Act pertains to the same matter which is the subject-matter of investigation by the Assistant Commissioner of State Tax, CST (Investigation-B), Mumbai. Placing reliance on clause (b) of sub-section (2) of section 6 of the CGST Act, Ms. Luccy Massey, the learned counsel for the petitioner- Company submits that the summons issued to the petitioner- Company under the CGST Act is illegal and without juri iction.
On a glance at the decision in “M/s. Armour Security (India) Ltd.”, we gather that the Circular dated 5th October 2018 which was issued by Central Tax Authority and State Tax Authority clarify the legal position and clearly authorizes both the officers of Central Tax Authority and State Tax Authority to carry on investigation. Under paragraph no.4 of the Circular dated 5th October 2018 it is stated that, if an officer of the Central Tax Authority initiates intelligence based enforcement action against a tax-payer which is assigned to a State 1 2025 INSC 982 (Special Leave Petition (C) No.6092 of 2025 – Judgment dated 14th August 2025) 3/5 902-WP-877-2026.doc Dixit
Tax Authority on the administrative side then the officer of the Central Tax Authority would not transfer the case to the said tax-payer’s counterpart and would himself take the case to its logical conclusion. The expression “logical conclusion” has been explained by the Hon’ble Supreme Court in the said case not to invariably refer to an order of assessment in every case. In paragraph nos.76 and 77 of the reported judgment, Hon’ble Supreme Court has held as under:- “76. The said Circular is premised on the administrative division of the taxpayer base, as explained in Circular No.01/2017 dated 20.09.2017. We would like to underscore that this division of the taxpayer base does not operate as a bar to the initiation of enforcement action by Central Tax officers against a taxpayer assigned to the State Tax authority and vice versa.
Enforcement action undertaken by any Department is ordinarily based on intelligence as elucidated by us in paragraph 48 of this judgment and the authority initiating such action is empowered to carry the matter to its logical conclusion. The term “logical conclusion” does not invariably refer to an order of assessment in every case. Rather, it denotes the decision arrived at by the officers of the Department, having regard to the peculiar facts and circumstances of each case.”
The contention raised on behalf of the petitioner-Company that the action taken by the CGST officer is not permissible in view of the provisions under clause (b) of sub-section (2) of section 6 of the CGST Act is liable to be rejected. The provisions under clause (b) of sub- section (2) of section 6 shall apply to the case of initiation of two parallel proceedings if the subject matter of both is the same. However, this is not the factual situation in the present case. The records would reveal that on serious allegations of committing violations of the GST Act, a proceeding was initiated and one of the Directors of M/s. Dawnak Enterprises LLP was arrested. The Director of the petitioner- Company was issued summons and he has approached the Court for 4/5 902-WP-877-2026.doc Dixit
anticipatory bail which was granted to him by an order dated 13th October 2025. There is an allegation that the petitioner-Company has availed input tax credit amount upto Rs.2.56 crores based on invoices or bills without supply of goods or services. There are other serious allegations made against both the Companies to which we are not referring to at the present moment. The violations of the goods and services tax enactment seriously challenges the financial stability of the country and merely on raising a technical plea, the writ Court should not exercise its discretionary powers in favour of a violator.
We find no merit in this writ petition which is, accordingly, dismissed. [ GAUTAM A. ANKHAD, J. ]
[ CHIEF JUSTICE ] 5/5 902-WP-877-2026.doc Dixit SNEHA ABHAY DIXIT SNEHA ABHAY DIXIT Date: 2026.04.07 10:16:32 +0530
Reproduced from the public record of the Bombay High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.