Drj Petrochem PVT. LTD. vs. Sales Tax Officer Class-Ii/Avato, Department Of Trade And Taxes

Facts

The petitioner, DRJ Petrochem Pvt. Ltd., has challenged a Show Cause Notice (SCN) issued by the Sales Tax Officer Class-II/AVATO, Department of Trade and Taxes, under Section 73 of the Central Goods & Services Tax Act, 2017. The petitioner's primary contention is that the tax period under scrutiny in this SCN is already the subject of an investigation and adjudication by the Directorate General of GST Investigation (DGGI), Chandigarh. The respondent, represented by the Sales Tax Officer, stated that no further steps would be taken concerning the impugned SCN pending the outcome of the DGGI's proceedings.

Held

The Court noted the respondent's submission that no further steps would be taken pursuant to the impugned Show Cause Notice pending the outcome of the proceedings initiated by the Directorate General of GST Investigation (DGGI). The Court recorded and accepted this statement. Consequently, the writ petition was disposed of in terms of this undertaking by the respondent. The Court did not delve into the merits of the petitioner's challenge to the SCN itself, nor did it decide the question of law regarding the propriety of parallel proceedings. The operative direction was to dispose of the petition based on the respondent's statement.

Key Issues

1. Whether the issuance of a Show Cause Notice under Section 73 of the Central Goods & Services Tax Act, 2017, by the State GST authority is vitiated when the same tax period is already under investigation by the Directorate General of GST Investigation (DGGI)? Arguments for the Petitioner: The petitioner argued that initiating parallel proceedings for the same tax period by different authorities is improper and leads to multiplicity of litigation. They relied on the principle that a matter under investigation by a specialized agency should not be simultaneously pursued by another authority. Arguments for the Respondent: The respondent, through its counsel, stated that they would await and be subject to the outcome of the proceedings initiated by the DGGI. They did not contest the petitioner's assertion regarding the parallel investigation but indicated a deferral of their own proceedings.