M/S. Agrawal Soya Extracts PVT. LTD.Through Its Director Shri Deepak Singhal vs. Union Of INDIA

Held

The Court held that, in light of the Supreme Court's decision in Armour Security (India) Limited v/s Commissioner CGST, Delhi East Commissionerate, the issuance of summons does not constitute the 'initiation of proceedings' under Section 6(2)(b) of the CGST Act. The expression 'initiation of any proceedings' refers to the formal commencement of adjudicatory proceedings by way of a show cause notice. The Court noted that the petitioner had not produced the show-cause notice issued by the CGST Authority at Ujjain. Therefore, the Court directed the petitioner to appear before the Additional Assistant Director, DGGI, Bhopal, with all documents related to the notice issued by the CGST Authority at Ujjain. The Additional Assistant Director was instructed to decide strictly in terms of the Apex Court's guidelines in Armour Security Limited whether to proceed further, ensuring compliance with the spirit of the Apex Court's judgment. The Court also clarified that if the petitioner failed to appear on the specified dates, no fresh notice would be issued, and the authority would proceed to pass a final order. The interim relief granted earlier was vacated.

Facts

The petitioner, M/s. Agrawal Soya Extracts Pvt. Ltd., a company engaged in soybean product extraction and sales, filed a writ petition challenging multiple summons issued by the Additional Assistant Director, Directorate General of GST Intelligence (DGGI), Bhopal. The DGGI initiated an inquiry regarding transactions with six companies and Input Tax Credit (ITC) amounting to Rs. 3,93,61,066/-. The petitioner contended that these proceedings violated Section 6(2)(b) of the CGST Act, as similar allegations and a show-cause notice under Section 74(1) had already been issued by the Commissioner, CGST & Central Excise, Ujjain. Subsequent notices from the DGGI reduced the number of companies and the ITC amount. The respondents argued that the writ petition was not maintainable and that Section 6(2)(b) does not apply at the investigation/enquiry stage.

Key Issues

1. Whether the issuance of summons by the DGGI, Bhopal, constitutes 'initiation of proceedings' under Section 6(2)(b) of the CGST Act, when a show-cause notice on the same subject matter has already been issued by the CGST & Central Excise, Ujjain? Petitioner's arguments: The petitioner argued that the DGGI's summons were in violation of Section 6(2)(b) of the CGST Act, which bars multiple proceedings on the same subject matter. They contended that since the CGST Authority at Ujjain had already initiated proceedings by issuing a show-cause notice under Section 74(1) concerning similar allegations and tax liability, the DGGI's subsequent actions constituted parallel proceedings on the same subject matter. Respondents' arguments: The respondents argued that the writ petition was not maintainable. They contended that the bar under Section 6 of the CGST Act does not apply at the investigation/enquiry stage, and that the petitioner could raise objections after any notice or summon is issued under Section 74. They relied on the Supreme Court judgment in Armour Security (India) Limited v/s Commissioner CGST, Delhi East Commissionerate.