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Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.20151 of 2024 Bipin Kumar Agrawal …. Petitioner -Versus- The Commissioner CGST and Central Excise, Rourkela and others …. Opposite Parties Advocates appeared in this case: For Petitioner :Mr. S.S. Padhy, Advocate For Opposite Parties :Mr. Umesh Chandra Sahoo, Advocate (Junior Standing Counsel) Mr. Sunil Mishra, Advocate (Standing Counsel) CORAM: THE HON’BLE MR. JUSTICE ARINDAM SINHA, ACTING CHIEF JUSTICE AND THE HON’BLE MR. JUSTICE M.S. SAHOO J U D G M E N T -------------------------------------------------------------------------------------- Date of hearing and judgment: 24th February, 2025 -------------------------------------------------------------------------------------- ARINDAM SINHA, ACJ. 1. The writ petition was moved on 6th September, 2024 by
Legal Reasoning
Mr. Padhy, learned advocate appearing on behalf of petitioner. Mr. W.P.(C) no.20151 of 2024 Page 1 of 8 Sahoo, learned advocate, Junior Standing Counsel appears on behalf of Central revenue and Mr. Mishra, learned advocate, Standing Counsel, for State revenue. 2. On behalf of petitioner it was earlier submitted, impugned is order dated 26th April, 2024 passed by the Assistant Commissioner, GST and Central Excise. It is an order, subject matter of which was scrutiny. Section 61 in Central Goods and Services Tax Act, 2017 provides for scrutiny and the order was made for demand under section 74. The scrutiny and demand were for periods 2017-18 and 2018-19. For the periods, the State authorities had already conducted audit and final audit report dated 4th May, 2023 stands disclosed. The provision for audit is section 65. Referring to section 6(2)(b) it was submitted, impugned order be interfered with because there already has been a concluded proceeding in respect of subject matter of the proceeding initiated by Central revenue, resulting in impugned order. 3. We reproduce below paragraph 4 from our order dated 6th September, 2024. W.P.(C) no.20151 of 2024 Page 2 of 8 “4. Definitions section 2 does not define proceeding. Opposite parties have adjournment to make out their
Decision
case on opposing the writ petition.” 4. There does not appear to be dispute on facts. Central revenue had issued summons, after which State revenue had issued notice and got conducted audit. Report was filed. Section 65 in Odisha Goods and Services Tax Act, 2017 provides for audit. Sub- section (7) therein permits the proper officer to initiate action, inter alia, under section 74. Provisions in the Act correspond to provisions in Central Goods and Services Tax Act, 2017. On the audit concluded, petitioner accepted relevant paragraphs in the report, to meet the short payment of tax. 5. Mr. Padhy submits, the summons was issued prior to notice issued by State revenue. However, the show cause notice was issued after the audit report filed and his client having accepted it to pay the difference pointed out. In the circumstances, there stood a proceeding concluded before the show cause notice was issued by Central revenue. He relies on view taken on judgment dated 2nd December, 2020 by a Division Bench of the High Court of Allahabad in Civil Misc. Writ (Tax) Petition W.P.(C) no.20151 of 2024 Page 3 of 8 no.666 of 2020 in G.K. Trading Company v. Union of India and others. He places paragraph 10 (Manupatra print), reproduced below. “10. The words “subject-matter”, “proceedings” and “inquiry” have not been defined either under the State G.S.T. Act or the Union Territory G.S.T. Act or the C.G.S.T. Act. Therefore, these words have to be interpreted in the context of the aforesaid Acts. 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 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 U.P.G.S.T. Act/C.GS.T. Act.” Mr. Padhy also relies on paragraphs 17 and 18, reproduced below. W.P.(C) no.20151 of 2024 Page 4 of 8 “17. Thus, Section 6(2)(b) of the C.GS.T. Act prohibits separate initiation of proceedings on the same subject-matter by the proper officer under the C.GS.T. Act when proceeding on the same subject- matter by the proper officer under the State Act has been initiated, whereas Section 70 of the U.P.GS.T./C.GS.T. Act merely empowers the proper officer to summon any person in any inquiry. The word "proceedings" used in Section 6(2)(b) is qualified by the words "subject-matter" which indicates an adjudication process/proceedings on the same cause of action and for the same dispute which may be proceedings relating to assessment, audit, demands and recovery, and offences and penalties etc. These proceedings are subsequent to inquiry under Section 70 of the Act. The words "in any inquiry" used in Section 70 of the Act is referable to the provisions of Chapter XIV, i.e. Section 67 (power of inspection, search and seizure), Section 68 (inspection of goods in movement), Section 69 (power to arrest), Section 71 (access to business premises) and Section 72 (officers to assist proper officers). Therefore, proper officer under the U.P.GS.T. Act or the C.GS.T. Act may invoke power under Section 70 in any inquiry. Prohibition of Section 6(2)(b) of the C.GS.T. Act shall come into play only when any proceeding on the same subject-matter has already W.P.(C) no.20151 of 2024 Page 5 of 8 been initiated by a proper officer under the U.P.GS.T. Act. 18. Thus, 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.” (emphasis supplied) 6. We respectfully agree with view taken in G.K. Trading Company (supra). The provisions in Central Goods and Services Tax Act, 2017 correspond to provisions in Odisha Goods and Services Tax Act, 2017. It follows that the legislature intended there should not be overlap in making probe. Clause (b) under sub- section (2) in section 6 of Central Goods and Services Tax Act, 2017 is reproduced below. “6(2)(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 W.P.(C) no.20151 of 2024 Page 6 of 8 shall be initiated by the proper officer under this Act on the same subject matter.” (emphasis supplied) Clause (b) under sub-section (2) in section 6 of Odisha Goods and Services Tax Act, 2017 carries converse description of the proper officer as under the Central Act. Rest of the provision is same. 7. In view of aforesaid we are satisfied that State revenue had probed by initiating audit. In G.K. Trading Company (supra) view taken includes audit to be a proceeding. Undisputed fact is, the show cause notice issued by Central revenue was after commencement of audit. We are clear in our mind that a summons issued under section 70 means the process of collection of evidence or gathering of material, as by interpretation of word ‘investigation’ given by the Supreme Court in Liberty Oil Mills v. Union of India reported in (1984) 3 SCC 465 with reference to investigation mentioned in provisions of Import and Export Control Act and Imports (Control) Order, 1955. There is also no dispute that subject matter of both proceeding are same. 8. Impugned order dated 26th April, 2024 passed by the Assistant Commissioner, GST and Central Excise is set aside and W.P.(C) no.20151 of 2024 Page 7 of 8 quashed. The interference is severable so there must be re- computation. 9. The writ petition is allowed and disposed of. (Arindam Sinha) Acting Chief Justice Judge (M.S. Sahoo) Arun Mishra/ S. Behera Signature Not Verified Digitally Signed Signed by: ARUN KUMAR MISHRA Designation: ADR-Cum-Addl. Principal Secretary Reason: Authentication Location: High Court of Orissa, Cuttack Date: 25-Feb-2025 15:06:06 W.P.(C) no.20151 of 2024 Page 8 of 8