GST Authorities can initiate Inquiry u/s 70 with proceedings u/s Section 6(2)(b): Madras High Court [Read Judgment]

GST Authorities - Madras High Court - Taxscan

The Madras High court held that the GST Authorities can initiate inquiry under section 70 with proceedings under section 6(2)(b) of the CGST Act.

The appellant, Kuppan Gounder P.G.Natarajan is the Managing Director of a Company registered under the Indian Companies Act, 1956, which is engaged in the business of transportation. The appellant sought to quash the summons issued by the respondent under Section 70 of the Central Goods and Services Tax Act, 2017.

Mr.E.Om Prakash, the counsel for the appellant submitted that the appellant’s company falls within the State jurisdiction under the State Goods and Service Tax Act, 2017 and the respondent is an authority with the central jurisdiction and therefore, he has no jurisdiction to initiate any proceedings under the CGST/SGST Act more so when the State authority had already initiated action and the matter is pending at different stages.

Mr. Prakash further contended that under Section 62 of the SGST Act, an assessment can be made, however, the said provision would not apply to the appellant’s case, and even going by the said provisions, which refer to the ‘proper office’, it would mean in the appellant’s case, the State authority and not the respondent. Further, it is submitted that there is no notification or order empowering the respondent to initiate assessment proceedings or raise a demand against the appellant, as they fall within the jurisdiction of the State authority under the SGST Act. Further, it is submitted that the State authority had already issued two notices in respect of the alleged discrepancy in the returns and the matter is pending within their jurisdiction and at that juncture, the respondent has no jurisdiction to issue the summons.

The division bench of Justice T.S. Sivagnanam and Justice Sathi Kumar Sukumara Kurup held that the scope of Section 6(2)(b) and Section 70 is different and distinct, as the former deals with any “proceedings on a subject matter/same subject matter” whereas, Section 70 deals with power to summon in an inquiry and therefore, the words “proceedings” and “inquiry” cannot be mixed up to read as if there is a bar for the respondent to invoke the power under Section 70 of the CGST Act.

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