{Arising out of order dated 9-10-2023 passed by the learned Single Judge in W.P.(T)No.85/2023} v. (
Case Details
Page 1 of 10 (W.A.No.494/2023) SISTA SOMAYAJULU Digitally signed by SISTA SOMAYAJULU Date: 2025.07.29 14:47:09 +0530 2025:CGHC:34815-DB AFR HIGH COURT OF CHHATTISGARH AT BILASPUR WA No. 494 of 2023 {Arising out of order dated 9-10-2023 passed by the learned Single Judge in W.P.(T)No.85/2023} South Eastern Coalfields Limited having its registered office at SECL Bhawan, Seepat Road, Bilaspur, Chhattisgarh-495006 versus (Petitioner) ... Appellant 1. Principal Commissioner, CGST, Raipur GST Bhawan, Dhamtari Road, Tikrapara, Raipur-492001 (C.G.) 2. Additional Commissioner (Preventive), CGST, Raipur GST Bhawan, Dhamtari Road, Tikrapara, Raipur-492001 (C.G.) PROFORMA RESPONDENTS 3. Assistant Commissioner, State GST, Circle-II, Ambey Plaza, Tifra, 2nd Floor, In front of New Hightech Bus Stand, Bilaspur (C.G.) 4. Commissioner, State GST, GST Bhawan, Atal Nagar, Naya Raipur, District Raipur (C.G.) ... Respondents For Appellant
Legal Reasoning
: Mr. Rajeev Agrawal, Mr. Sanjay Dixit and Mr. For Respondents No.1 & 2 For Respondents No.3 & 4 Rakshit Tiwari, Advocates. : Mr. Ashutosh Singh Kachhawaha, Advocate. : Mr. Prafull N. Bharat, Advocate General with Mr. Rahul Tamaskar, Government Advocate. Division Bench: - Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Sachin Singh Rajput, JJ. Page 2 of 10 (W.A.No.494/2023) Judgment on Board (22/07/2025) Sanjay K. Agrawal, J. 1. Invoking the writ appellate jurisdiction of this Court under Section 2(1) of the Chhattisgarh High Court (Appeal to Division Bench) Act, 2006, South Eastern Coalfields Limited (SECL) – the appellant herein, has preferred this writ appeal calling in question legality, validity and correctness of judgment & order dated 9-10-2023 passed by the learned Single Judge in W.P. (T)No.85/2023, by which its writ petition challenging the show cause notice dated 6th/16th January, 2023 issued by respondent No.2 herein under Section 73 of the Central Goods and Services Tax Act, 2017 (for short, ‘the CGST Act’) has been dismissed by the learned Single Judge holding that the writ appellant is at liberty to file reply to the show cause notice and no case for interference is made out in writ jurisdiction. 2. The aforesaid challenge of the order passed by the learned Single Judge has been made on the following backdrop: - 3. The appellant SECL is engaged in mining activity and holding GSTIN: “22AADCS2066E9ZL” in terms of Section 22 of the CGST Act and on 27-8-2021, inspection under Section 67(1) of the CGST Act was carried by the Central GST authorities with the approval of competent authority for non-payment of GST Page 3 of 10 (W.A.No.494/2023) under Reverse Charge Mechanism (RCM) on Development Cess and Environment Cess for the period from July, 2017 to August, 2021. Thereafter, on 30-8-2021, memo was issued for payment of dues of GST under RCM by respondent No.1 and in the meanwhile, on 21-9-2021/13-10-2021 (Annexure P-1), summary of show cause notice in Form DRC-01 was issued by respondent No.3 along with statement in DRC-02 to which the appellant submitted reply on 26-11-2021 vide Annexure P-2. Thereafter, again on 21-2-2022/16-3-2022, DRC-01 with show cause notice was issued to the appellant, again without issuance of DRC-01A by respondent No.3 vide Annexure P-3 to which also the appellant submitted reply on 12-4-2022 vide Annexure P-4. However, on 27-4-2022, proceedings in pursuance of DRC-01 & DRC-02 were closed by respondent No.3 in view of second show cause notice dated 21-2-2022/16-3-2022, however, by order dated 13-6-2022 (Annexure P-5), second show cause notice was not proceeded with in light of reply dated 13-4-2022 without specifying any reason whatsoever and without any adjudication at all. Pre–show cause notice under Rule 142 (1A) of the CGST Rules, 2017 was issued by respondent No.1 in Form GST DRC- 01A dated 7/9-12-2022 (Annexure P-6) and reply was submitted by the noticee/appellant herein on 14-12-2022 (Annexure P-7). Thereafter, show cause notice under Section 73 of the CGST Act Page 4 of 10 (W.A.No.494/2023) was issued by respondent No.2 on 6/16-1-2023 (AnnexureP-8) along with letters; summons and the statement of Mr. Abhishek Anand, Manager (Finance), which was challenged in the writ petition and which was dismissed by the learned Single Judge leading to filing of this writ appeal. 4. Mr. Rajeev Agrawal, learned counsel appearing for the SECL/appellant herein, would submit that the show clause notice dated 6/16-1-2023 issued by the Additional Commissioner (Preventive) is barred by Section 6(2)(b) of the CGST Act, as the earlier show cause notices which have already been issued, were already closed by orders dated 27-4-2022 and 13-6-2022. He would rely upon the decision of the Allahabad High Court in the matter of G.K. Trading Company v. Union of India and others1 and also upon the decision of the Madras High Court in the matter of Kuppan Gounder P.G. Natarajan v. Directorate General of GST Intelligence, New Delhi2 to buttress his submission. 5. Mr. Prafull N. Bharat, learned Advocate General appearing for the State of Chhattisgarh/respondents No.3 & 4, would submit that inspection by the Central GST was carried out on 27-8- 2021 i.e. well before the DRC-01 was issued by the State GST and the appellant has evaded specific pleading with respect to 1 2020 SCC OnLine All 1907 2 2021 SCC OnLine Mad 17053 Page 5 of 10 (W.A.No.494/2023) the date of initiation of proceedings by the Central GST by stating in para 8.4 of the petition that proceedings were initiated by both Central and State Departments simultaneously. He would further submit that mere issuance of DRC-01 would not constitute initiation of proceedings and similarly, issuance of DRC-01 and show cause notice without DRC-01A for the period when it was mandatory will not constitute proper proceedings to act as a bar under Section 6(2) (b) of the CGST Act. He would finally submit that there is absolutely no adjudication by the State authorities as no reason whatsoever has been assigned for dropping the proceedings and the proceedings were dropped as similar proceedings were already initiated by the Central authorities on 27-8-2021. He would rely upon the decision of the Allahabad High Court in G.K. Trading Company (supra) and that of the Orissa High Court in the matter of Sonam Berlia v. State of Odisha3 in support of his contention and submit that the writ appeal deserves to be dismissed. 6. We have heard learned counsel for the parties and considered their rival submissions made herein-above and also went through the record with utmost circumspection. 3 2021 (51) G.S.T.L. 25 (Ori.) Page 6 of 10 (W.A.No.494/2023) 7. In order to consider the plea raised at the Bar, it would be appropriate to notice Section 6(2)(b) of the CGST Act, which states as under: - “6. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances.—(1) xxx xxx xxx (2) Subject to the conditions specified in the notification issued under sub-section (1),— (a) xxx xxx xxx (b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter. (3) xxx xxx xxx” 8. A careful perusal of the aforesaid provision would show that where a proper officer under the State Goods and Service Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no further proceedings shall be initiated by the proper officer under the CGST Act on the same subject matter. As such, Section 6(2)(b) of the CGST Act bars a proper officer under the Act to initiate any proceeding on a subject-matter where on the same subject- matter proceeding by a proper officer under the State GST Act has been initiated. Similarly, Section 6(2)(b) of the CGST Act read with the clarification issued by the Central Board of Excise Page 7 of 10 (W.A.No.494/2023) & Customs, New Delhi on 5-10-2018, it is quite vivid that the State & Central Tax administrations both are entitled to initiate intelligence based enforcement action separately and cross-empowerment of both authorities is permitted under the scheme of the CGST Act. 9. Similarly, the Government of India has issued a circular dated 5-10-2018 clarifying that Central and State Tax are authorised to initiate intelligence based enforcement action on the entire taxpayer’s base irrespective of the administrative assignment of the taxpayer to the authority and it has been further clarified that the authority which initiates such action is empowered to complete the entire process of investigation, issuance of show cause notice, adjudication, recovery, filing of appeal, etc. arising out of such action. 10. In G.K. Trading Company (supra), the Allahabad High Court has considered the meaning of “any proceeding” on the same “subject-matter” for the purpose of Section 6(2)(b) of the CGST Act and held in paragraph No.19 as under: - “19 (i) The word "inquiry" in section 70 has a special connotation and a specific purpose to summon any person whose attendance may be considered necessary by the proper officer either to give evidence or to produce a document or any other thing. It cannot be intermixed with some statutory steps which may precede or may ensue upon the making of the inquiry or conclusion of inquiry. The process of inquiry under section 70 is specific and unified by the very purpose for which provisions of Page 8 of 10 (W.A.No.494/2023) Chapter XIV of the Act confers power upon the proper officer to hold inquiry. The word "inquiry" in section 70 is not synonymous with the word "proceedings", in section 6(2)(b) of the UPGST Act/CGST Act. (ii) The words “any proceeding” on the same “subject- matter” used in section 6(2)(b) of the Act, which is subject to conditions specified in the notification issued under sub- section (1) ; means any proceeding on the same cause of action and for the same dispute involving some adjudication proceedings which may include assessment proceedings, proceedings for penalties, etc., proceedings for demands and recovery under sections 73 and 74, etc. (iii) Section 6(2)(b) of the CGST Act prohibits a proper officer under the Act to initiate any proceeding on a subject-matter where on the same subject-matter proceeding by a proper officer under the UPGST Act has been initiated. ” 11. As such, there must be some adjudication proceedings which may include assessment proceedings, proceedings for penalties, etc., proceedings for demands and recovery under Sections 73 and 74 of the CGST Act. 12. Turning to the facts of the present case, in the instant case, first proceeding has been initiated by the Central GST authorities on 27-8-2021 by conducting inspection under Section 67(1) of the CGST Act and thereafter, on 30-8-2021 memo was issued for payment of dues of CGST to the appellant assessee under Reverse Charge Mechanism (RCM) by the office of Principal Commissioner, CGST, Raipur to the extent of ₹ 1,20,09,15,450/- (total tax). Since the first proceeding has already been initiated by the Central GST, therefore, the State Page 9 of 10 (W.A.No.494/2023) GST authorities were not competent to initiate any proceeding and furthermore, the proceedings in pursuance of DRC-01 and DRC-02 dated 21-9-2021 and 13-10-2021, respectively, were closed in light of other case by the Assistant Commissioner, State GST, Bilaspur and second show cause notice dated 21-2- 2022/16-3-2022 was not proceeded with in view of reply dated 13-4-2022 filed by the appellant without specifying any reason whatsoever and without any adjudication proceeding including assessment proceeding, proceeding for penalties, etc., proceedings for demands and recovery under Sections 73 & 74 of the CGST Act, therefore, the proceeding initiated by the Central GST was not barred by Section 6(2)(b) of the CGST Act. As held earlier, Section 6(2)(b) of the Act prohibits a proper officer of CGST under the Act to initiate any proceeding on a subject- matter where on the same subject-matter proceeding by a proper officer under the Chhattisgarh GST Act has been initiated.
Decision
13. In view of the above, it is quite vivid that the Central GST had already initiated proceeding against the appellant SECL way back on 27-8-2021 by carrying out inspection under Section 67(1) of the CGST Act and finally, show cause notice was issued on 6/16-1-2023. The State authorities even though were not having jurisdiction to initiate proceeding on the same cause of action and for the same dispute involving adjudication Page 10 of 10 (W.A.No.494/2023) proceedings which include assessment proceedings, proceedings for penalties, etc., proceedings for demands and recovery under Sections 73 & 74 of the CGST Act. Therefore, we are unable to accept the plea raised by the learned counsel for the appellant that the proceeding initiated by the Central GST by way of show cause notice dated 6/16-1-2023 was barred by Section 6(2) (b) of the CGST Act. 14. In that view of the matter, we are unable to interdict the order passed by the learned Single Judge, as the learned Single Judge has rightly dismissed the writ petition. We do not find any merit in the writ appeal, it deserves to be and is accordingly dismissed leaving the parties to bear their own cost(s). Sd/- (Sanjay K. Agrawal) JUDGE Sd/- (Sachin Singh Rajput) JUDGE Soma