M/S Prime Steel Industries PVT LTD vs. The State Of Hp And Another

Held

The Court noted that Respondent No. 2 had transferred the proceedings to Respondent No. 1, as evidenced by a letter dated 24.04.2025. This transfer meant that the instant petition, which challenged the parallel proceedings, had achieved its purpose. Furthermore, learned counsel for Respondent No. 2 submitted, on instructions, that the blocked credit ledger of the petitioner had been unblocked. This averment was supported by Respondent No. 2's reply, which stated that the investigation had been transferred to Respondent No. 1 and the Input Tax Credit was unblocked. Consequently, the writ petition was disposed of as having achieved its purpose due to the transfer of proceedings and the unblocking of the credit ledger. The Court did not delve into the merits of the jurisdictional challenge under Section 6(2)(b) of the CGST Act, as the circumstances leading to the petition were resolved.

Facts

M/s Prime Steel Industries Pvt. Ltd. (Petitioner) filed a writ petition before the High Court of Himachal Pradesh challenging the initiation of parallel proceedings by Respondent No. 1 (State of H.P.) and Respondent No. 2 (Senior Intelligence Officer, DGGI, Meerut Zonal Unit). The petitioner was aggrieved by a summons dated 13.12.2024 issued by Respondent No. 2 under Section 70 of the Central Goods and Services Tax Act, 2017, and the subsequent blocking of its credit ledger on the GST Portal on 01.01.2025 and 06.01.2025. The petitioner contended that these actions were without jurisdiction and in violation of Section 6(2)(b) of the CGST Act. Respondent No. 1 had initiated proceedings earlier, issuing a notice on 03.08.2021, to which the petitioner replied on 17.08.2021. The Court had directed both respondents to file affidavits detailing their stand.

Key Issues

1. Whether the summons dated 13.12.2024 issued by Respondent No. 2 under Section 70 of the Central Goods and Services Tax Act, 2017, and the consequential action of blocking the credit ledger of the petitioner were without jurisdiction and in violation of Section 6(2)(b) of the CGST Act, 2017? Petitioner's Contention: The petitioner argued that the actions of Respondent No. 2 were without jurisdiction and contrary to Section 6(2)(b) of the CGST Act, which prohibits parallel proceedings when an investigation has already been initiated by another authority. They sought to quash the summons and the blocking of the credit ledger. Respondents' Contention: Respondent No. 1 submitted that it had initiated proceedings earlier and requested to be allowed to conclude them. Respondent No. 2, through counsel, stated that the investigation had been transferred to Respondent No. 1 and that the credit ledger had been unblocked. The respondents' primary contention, as reflected in their actions and submissions, was that the issue of parallel proceedings and blocked credit ledger was being addressed.