Sri Subhash Agarwalla vs. The State Of Assam And 4 Ors

WP(C)/683/2024HC GauhatiGSTCNR GAHC01002151202409 March 2026Bench: HONOURABLE MR. JUSTICE SANJAY KUMAR MEDHI3 pages

AI SummaryAllowed

Facts

The petitioner, Sri Subhash Agarwalla, received a show cause notice dated 23.11.2022 from the State GST authorities alleging availing and utilising Input Tax Credit (ITC) of Rs. 14,14,657.00 for the financial year 2017-2018, in violation of Section 16(4) of the CGST/AGST Act. Subsequently, the Central GST authorities issued a demand-cum-show cause notice on 27.04.2023 for the financial years 2017-2018 to 2019-2020, also alleging violation of the same provision regarding ITC. The Central GST proceeding culminated in an order dated 14.11.2023, confirming a demand of Rs. 1,31,56,521/- including interest. The petitioner filed a writ petition challenging the parallel proceedings by both State and Central GST authorities for the same period and subject matter.

Held

The Court held that parallel proceedings for the same tax period and the same subject matter by both the State GST and Central GST authorities are not permissible. The Court noted the admitted position that there was an overlapping of the period for which the proceedings were initiated. Since the proceeding initiated by the Central GST authorities had attained finality with the order dated 14.11.2023, the Court found no justification for the State GST authorities to initiate and pursue another proceeding on the same subject matter and for the same period. Consequently, the Court interfered with and set aside the proceeding initiated by the State GST authorities, which was based on the show cause notice dated 23.11.2022 and culminated in a final order dated 11.12.2023. The ratio decidendi is that once a matter concerning tax liability for a specific period and issue has been adjudicated by one tax authority (either Central or State GST), the other authority cannot initiate parallel proceedings for the same period and issue.

Key Issues

1. Whether parallel proceedings for the same tax period and the same alleged violation of law can be initiated by both the State GST and Central GST authorities against the petitioner? (Question of law) The petitioner argued that initiating two separate proceedings for the same period and the same issue (availing and utilising ITC in violation of Section 16(4) of the CGST/AGST Act) is impermissible. He contended that since the Central GST authorities had already adjudicated the matter and passed a final order dated 14.11.2023, the State GST authorities could not proceed parallelly. The petitioner relied on the principle that once an issue is adjudicated by one authority, another authority cannot re-adjudicate the same matter. The respondent State GST authorities, through their Standing Counsel, fairly submitted that there was no dispute with the factual proposition that there was an overlapping of the period for which the proceedings were initiated by both the tax departments.

Sections Cited

Section 16(4)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

Page No.# 1/3 GAHC010021512024 undefined THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/683/2024 SRI SUBHASH AGARWALLA SON OF HANSRAJ AGARWALLA, RESIDENT OF WARD NO.13, ANAND NAGAR PATH, P.O., P.S. AND DISTRICT-SIVASAGAR, ASSAM-786540 VERSUS THE STATE OF ASSAM AND 4 ORS REPRESENTED BY THE COMMISSIONER AND SECRETARY TO THE GOVERNMENT OF ASSAM, DEPARTMENT OF FINANCE AND TAXATION, DISPUR ASSAM 2:THE PRINCIPAL COMMISSIONER STATE GOODS AND SERVICES TAX KAR BHAWAN G.S. ROAD DISPUR GUWAHATI 781006 3:THE JOINT COMMISSIONER STATE GOODS AND SERVICES TAX SIVASAGAR ZONE SIVASAGAR ASSAM 4:THE COMMISSIONER CENTRAL GOODS AND SERVICE TAX MILAN NAGAR LANE -F P.O- C.R BUILDING DIBRUGARH 786003 5:THE ASSISTANT COMMISSIONER CENTRAL GOODS AND SERVICE TAX Page No.# 2/3 DIBRUGARH DIVISION C.R BUILDING DIBRUGARH-78600 Advocate for the Petitioner : MR. A K GUPTA, MS B SARMA,MR. R S MISHRA Advocate for the Respondent : SC, FINANCE AND TAXATION, SC, GST BEFORE HONOURABLE MR. JUSTICE SANJAY KUMAR MEDHI

ORDER 10.03.2026 Heard Shri R.S. Mishra, learned counsel for the petitioner. Also heard Shri B. Choudhury, learned Standing Counsel appearing for the State GST and Ms. N. Kakati, learned counsel appearing on instructions of Shri S.C. Keyal, learned Senior Standing Counsel, CGST.

Considering the facts and circumstances and as agreed to by the learned counsel for the parties, the instant writ petition is taken up for disposal at the admission stage.

As per the facts projected, a show cause notice dated 23.11.2022 was issued to the petitioner by the State GST alleging that during the financial year, 2017-2018, the petitioner had availed and utilised Input Tax Credit (ITC) to the tune of Rs. 14 lakhs (Rs. 14,14,657.00) which is in violation of Section 16 (4) of the CGST/ AGST.

During the pendency of the said process, the Central GST had also issued a demand cum show cause notice dated 27.04.2023 for the financial year 2017-2018 to 2019-2020 alleging that the petitioner had availed and utilised ITC in violation of the same provision of law.

Shri Mishra, the learned counsel has contended that for the same period and the same figure, two proceedings could not have been initiated.He has submitted that so far as the proceeding initiated by the Central GST is concerned, the same has Page No.# 3/3 culminated in an order in original dated 14.11.2023 confirming the demand of Rs. 1,31,56,521/- which includes interest. He accordingly submits that the CGST having adjudicated the aspect, the State GSTcould not have proceeded parallelly.

Shri Choudhury, the learned Standing Counsel, Finance Department has fairly submitted that there is no dispute with the factual proposition that there is an overlapping of the period.

That being the admitted position, this Court is of the view that since the proceeding initiated by the CGST has attained finality, there cannot be another proceeding on the same subject matter and for the same period by the State GST. Accordingly, the proceeding initiated againstthe respondent no. 3 vide show cause dated 23.11.2022 which culminated in the final order dated 11.12.2023 are interfered with and set aside.

Writ Petition accordingly stands allowed in the manner indicated aobve. JUDGE Comparing Assistant

Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.