M/S. Maharashtra Information Technology LTD. ( Mahait) Thr. Its Chief Finance Officer vs. The Union Of INDIA Thr. Its The Principal Secretary Government Of INDIA And Ors

Held

The Court declined to entertain the writ petition, holding that it was not a fit case for exercising extraordinary jurisdiction under Article 226 of the Constitution. The Court reasoned that the applicability of Section 6 of the CGST Act was contentious and required a detailed review of the two proceedings and their respective scopes. It was not possible to conclude that the show cause notice was "wholly without jurisdiction" without examining the factual matters. The Court noted that one of the relied-upon orders was from audit proceedings, and its scope under Section 6 needed examination. The precise status of the petitioner, which was disputed, also required determination. The Court cited several Supreme Court precedents, including Whirlpool Corporation, Rishi Techtex Ltd., Union of India v. Coastal Container Transporters Association, Special Director v. Mohd. Ghulam Ghouse, Mahanagar Telephone Nigam Ltd., Malladi Drugs and Pharma Ltd., State of Maharashtra v. Greatship (India) Limited, and United Bank of India v. Satyawati Tondon, emphasizing that writ petitions challenging show cause notices should not be entertained unless there is a total lack of jurisdiction or the notice is non-est in the eyes of the law. The Court directed the petitioner to respond to the show cause notice, extending the time for filing the reply by four weeks from the date of the order, i.e., up to 31 December 2025. The adjudicating authority was directed to dispose of the proceedings on merits after considering the reply, leaving all contentions of all parties open. Any order passed thereafter could be challenged in accordance with the law.

Facts

The petitioner, M/s. Maharashtra Information Technology Ltd. (Mahait), challenged a show cause notice dated 28 June 2025 issued by central GST authorities. Mahait contended that the issue raised in the show cause notice was already covered by two orders dated 22 April 2024 and 25 May 2025 issued by State GST authorities. The petitioner argued that under Section 6 of the CGST Act, once central authorities initiate proceedings, state officials cannot initiate proceedings on the same subject matter, and vice versa. The respondents argued that Mahait was not a government authority covered by the relied-upon notifications, the scope of the two investigations was dissimilar, and therefore Section 6 of the CGST Act was inapplicable. They also argued that the petition challenged only a show cause notice, and factual issues involved should be adjudicated in those proceedings.

Key Issues

1. Whether the impugned show cause notice issued by the central GST authorities is without jurisdiction, given that prior orders on the same subject matter were issued by State GST authorities, concerning the applicability of Section 6 of the CGST Act? Petitioner's arguments: The petitioner argued that Section 6 of the CGST Act prohibits initiation of proceedings by one tax authority if proceedings on the same subject matter have already been initiated and concluded by another tax authority. They contended that the two prior orders from the State GST authorities covered the issue, rendering the central authorities' notice without jurisdiction. Respondents' arguments: The respondents contended that the petitioner is not a government authority entitled to the benefits of the notifications they relied upon. They further argued that the scope of the investigations by the State and Central authorities was dissimilar, making Section 6 of the CGST Act inapplicable. Additionally, they argued that the petition challenges only a show cause notice, and factual issues should be resolved through the show cause notice proceedings, not by the High Court at this stage.