In a recent interim order, the Orissa High Court stayed a show cause notice ( SCN ) issued by the Centre under Section 74 of the Central Goods and Services Tax (CGST) Act, 2017, in response to a petition filed by the Orissa Industrial Infrastructure Development Corporation, Bhubaneswar.
The petitioner challenged the SCN dated July 26, 2024, on two grounds:
Consolidation of Jurisdiction — The petitioner argued that consolidation of action by the Centre and the State was impermissible, citing a precedent set by the Karnataka High Court in the Veremax Technologie Services Ltd. case and the explicit bar under section 6(2)(b): The petitioner asserted that the SCN was barred since the subject matter had already been addressed by the State GST authorities, invoking the non-duplication clause in Section 6(2)(b) of the CGST Act.
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The DGGI had, in spite of State GST completing Audit Assessment for the self same issue and period. The Corporation challenged the said notice, before the High Court of Orissa, Cuttack & the Court, after hearing the matter admit the same and stayed the SCN proceeding.
Advocate P.K. Harichandan represented the petitioner, while the Centre was represented by Junior Standing Counsel A. Kedia and State authorities by Standing Counsel S. Mishra.
The Division Bench of the Calcutta High Court, presided over by Justice Arindam Sinha and Justice M.S. Sahoo, noted that the issuance of the SCN by the Centre, despite prior action by the State, raised valid legal concerns.
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The High Court thus directed the opposite parties to obtain instructions on the matter.
The bench stayed the impugned SCN until the next hearing, scheduled for January 16, 2025, thereby providing temporary relief to the petitioner.
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