GST Authorities investigated Service Tax under Guise of Scrutinizing TRAN-1: Calcutta HC Restrains Coercive Action [Read Order]

The Calcutta HighCourt restrained the Goods and Services Tax (GST) authorities from employing coercive measures after it was alleged that the authorities had examined matters pertaining to the erstwhile service tax regime under the guise of scrutinising the petitioner’s TRAN-1 return filed during the transition to the GST framework.

The petitioner, Multireach Media Private Limited assailed an adjudication order dated February 5, 2025 issued under Section 74 of the WBGST/CGST Acts, 2017, claiming that the initiation of proceedings itself lacked jurisdiction.

Multireach Media contended that the show-cause notice dated June 14, 2024 was founded on alleged non-submission of documents sought by the Central GST Authorities. However, the notice did not specify which particular document had not been furnished.

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Ankit Kanodia, appearing for the petitioner argued that such absence of specificity rendered the notice vague and incapable of forming the basis of proceedings under Section 74. They further submitted that the allegation, if any, related to the period July 2017 to March 2018, and that the authorities lacked jurisdiction to utilise TRAN-1 scrutiny to travel into matters linked to service tax.

S.K. Dutta and Tanoy Chakraborty appearing for the State maintained that the authorities had validly exercised jurisdiction and that the matter involved factual determination, and as such the writ court should not interdict into the matter. They also contended that the petitioners had an alternative statutory remedy before the appellate forum under Section 107 of the Act.

The petitioner advocate however, maintained their argument for the interference of the High Court, referring to prior judgments in Eden Real Estates Private Limited & Anr. Vs. The Assistant Commissioner of State Tax, Bhabanipur Charge & Ors. (2024) and Bhagya Kalita vs. Union of India (2025) among others.

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Upon considering the submissions of both sides, Justice Om Narayan Rai Court held that a prima facie case had been made out. The Court observed that the show-cause notice did not identify which specific document was allegedly lacking, despite asserting that the petitioners had failed to furnish certain records.

Accordingly, the High Court considered it necessary to examine whether GST authorities indeed possessed jurisdiction to invoke Section 74 in the factual matrix presented, particularly given the allegation that issues relatable to the service tax regime were being examined through TRAN-1 scrutiny.

In light of the prima facie findings, the Court restrained the GST authorities from taking any coercive action based on the adjudication order dated February 5, 2025 until further orders, with the matter listed for further consideration on December 15, 2025.

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