M/S Luxmi Oil And Ginning Factory vs. Union Of INDIA And Ors

Facts

The petitioner, M/s Luxmi Oil and Ginning Factory, filed a writ petition challenging the initiation of parallel proceedings by both State and Central GST authorities concerning alleged fraudulent Input Tax Credit (ITC) claims. The petitioner argued that under Section 6(2)(b) of the CGST Act, 2017, only one proper officer, either from the State or the Centre, should have jurisdiction to examine such issues. The respondents, including the Union of India and others, submitted an order dated 14.05.2024. This order indicated a transfer of proceedings, resolving the issue of parallel jurisdiction.

Held

The Court noted that the core issue raised by the petitioner, concerning the violation of Section 6(2)(b) of the CGST Act, 2017, due to parallel proceedings by State and Central authorities, had been addressed. The respondents submitted an order dated 14.05.2024, which confirmed that the proceedings had been transferred to the jurisdiction of the State Authority. This effectively meant that the State Jurisdictional Authority would henceforth have the sole jurisdiction to examine the proceedings related to the petitioner's alleged involvement in framing ITC. The Court found that the substantial relief sought by the petitioner was being granted through this transfer of proceedings. Therefore, the writ petition was disposed of as having been rendered infructuous, as the issue of parallel proceedings was resolved.

Key Issues

1. Whether the initiation of parallel proceedings by both State and Central GST authorities for the alleged fraudulent framing of ITC violates Section 6(2)(b) of the CGST Act, 2017, which stipulates that only one proper officer can examine such issues? Petitioner's Contention: The petitioner argued that the simultaneous proceedings by both State and Central authorities were illegal and contrary to Section 6(2)(b) of the CGST Act, 2017, as it violates the principle of a single proper officer having jurisdiction. They contended that this dual action created confusion and potential for conflicting decisions. Respondents' Contention: The respondents, through an order dated 14.05.2024, submitted that the proceedings had been transferred to the State Authority, thereby resolving the issue of parallel jurisdiction. They did not explicitly argue against the petitioner's interpretation of Section 6(2)(b) but rather presented a resolution to the procedural conflict.