Orissa High Court

Bipin Kumar Agrawal vs The Commissioner Cgst And .... Opposite ... on 24 February, 2025

Author: Arindam Sinha

Bench: Arindam Sinha, M.S. Sahoo

       IN THE HIGH COURT OF ORISSA AT CUTTACK
                          W.P.(C) No.20151 of 2024

    Bipin Kumar Agrawal                                ....                 Petitioner


                                        -Versus-

    The Commissioner CGST and                          ....         Opposite Parties
    Central Excise, Rourkela and others

    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

                                JUDGMENT

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Date of hearing and judgment: 24th February, 2025

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ARINDAM SINHA, ACJ.

1. The writ petition was moved on 6th September, 2024 by

Mr. Padhy, learned advocate appearing on behalf of petitioner. Mr.

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 6 th

September, 2024.

"4. Definitions section 2 does not define proceeding. Opposite parties have adjournment to make out their 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

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.

"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

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

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.