Jaiprakash Associates LTD. Registered Com. vs. Union Of INDIA Ministry Of Finance

Held

The Court disposed of the writ petition with a specific direction. While acknowledging the revenue's submission that a writ petition against a show cause notice is generally not entertained, the Court addressed the petitioner's primary objection regarding parallel proceedings. The Court directed the respondent No.2 (Joint Director, DGGI) to first deal with and decide the petitioner's objection regarding the parallel proceedings in accordance with law, before proceeding further on the impugned show cause notice. This implies that the Court recognized the potential validity of the petitioner's argument under Section 6(2)(b) of the CGST Act and sought to have this preliminary issue resolved by the authority. The ratio decidendi is that a proper officer should not initiate parallel proceedings on the same subject matter if another proper officer has already assumed jurisdiction and proceedings are pending, and this objection must be addressed before further action is taken on the show cause notice.

Facts

The petitioner, Jaiprakash Associates Ltd., challenged a show cause notice dated 21.07.2020 issued by the Joint Director, Directorate General of GST Intelligence (DGGI), Bhopal, and recovery notices dated 18.09.2019 issued by the State Tax Officer, SGST, Rewa. The petitioner argued that the State Tax Officer had already initiated proceedings for recovery of interest on delayed payment under Section 50 of the MPGST Act, and appeals against those orders were pending before the Joint Commissioner, State Tax (Appeals). Despite this, the DGGI issued a parallel show cause notice under Section 73(1) of the CGST Act for the same period and the same amount of interest. The petitioner contended that this dual proceeding was impermissible under Section 6(2)(b) of the CGST Act, as the State proper officer had already assumed jurisdiction.

Key Issues

1. Whether the issuance of a show cause notice by the Joint Director, DGGI, under Section 73(1) of the CGST Act, for recovery of interest on delayed payment, is permissible when parallel proceedings for the same issue have already been initiated by the State Tax Officer under the MPGST Act and appeals against those orders are pending before the appellate authority? (Question of law, turning on Section 6(2)(b) of the CGST Act). Petitioner's contention: The petitioner argued that Section 6(2)(b) of the CGST Act prohibits the initiation of proceedings by another proper officer on the same subject matter if one proper officer under the State GST Act has already initiated proceedings. They contended that the State Tax Officer's prior initiation of recovery proceedings for interest on delayed payment, with appeals pending, meant the DGGI could not initiate parallel proceedings. Revenue's contention: The respondent (DGGI) argued that the writ petition against a show cause notice should not be entertained and the petitioner should be required to file a reply and raise objections before the proper officer.