GST Officer Erred by Issuing Order on Matter Already Before DGGI and Stayed by Karnataka HC: Bombay HC Quashes Order [Read Order]
The Bombay HC quashed a GST order after holding that the tax officer acted unfairly by proceeding with adjudication despite the same issue being pending before DGGI.
![GST Officer Erred by Issuing Order on Matter Already Before DGGI and Stayed by Karnataka HC: Bombay HC Quashes Order [Read Order]](https://images.taxscan.in/h-upload/2025/08/02/2072229-bombay-hc-taxscan.webp "GST Officer Erred by Issuing Order on Matter Already Before DGGI and Stayed by Karnataka HC: Bombay HC Quashes Order [Read Order]")
In a recent decision, the Bombay High Court quashed a GST order after finding that the tax officer had proceeded with adjudication even though the same matter was already under consideration by the Directorate General of GST Intelligence (DGGI) and stayed by the Karnataka High Court. HM Leisure, the petitioner, a recreational services provider, filed a writ petition challenging an...
In a recent decision, the Bombay High Court quashed a GST order after finding that the tax officer had proceeded with adjudication even though the same matter was already under consideration by the Directorate General of GST Intelligence (DGGI) and stayed by the Karnataka High Court.
HM Leisure, the petitioner, a recreational services provider, filed a writ petition challenging an order passed by the Assistant Commissioner of CGST, Goa, confirming a demand of Rs. 67.5 lakh under Section 74 of the CGST Act.
The petitioner’s counsel argued that the same issue classification and taxability of services such as bowling and video games was already being investigated by DGGI, Mumbai, and was covered under an earlier show cause notice dated 03.08.2024. The petitioner had also obtained a stay on that notice from the Karnataka High Court.
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Despite this, the CGST officer in Goa issued a separate show cause notice on 18.04.2022 and passed a final adjudication order on 30.01.2025. The petitioner’s counsel argued that this amounted to parallel proceedings on the same issue and time period, which was unfair and caused legal uncertainty.
They further argued that the officer in Goa should have either withdrawn or transferred the proceedings once the matter was taken over by DGGI and stayed by another High Court.
The department’s counsel argued that the show cause notice issued by the Goa Commissionerate dealt with certain distinct aspects, such as input tax credit discrepancies and specific local transactions, which were not part of the DGGI notice. They argued that the stay from the Karnataka High Court only applied to the DGGI proceedings and did not restrict the Goa office from proceeding with its own case.
The bench comprising Justices Bharati Dangre and Nivedita P. Mehta observed that if two different authorities initiate proceedings on the same matter and assessment period, it creates confusion, legal uncertainty, and hardship to the assessee.
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The court observed that the DGGI’s notice had an all-India scope, which already covered the Goa unit of the petitioner’s business. Once such a centralized proceeding had begun and was stayed by a competent High Court, the CGST Goa officer should not have proceeded independently.
The court found that the officer had acted despite the petitioner’s request to consolidate the proceedings and the existence of an overlapping central notice already under judicial consideration. It held that the adjudication by the Goa officer violated principles of fairness and resulted in duplication of proceedings.
The court quashed the adjudication order dated 30.01.2025 and the corresponding summary order in Form DRC-07. The petition was allowed with liberty to the authorities to proceed in accordance with law, subject to the outcome of the ongoing proceedings before DGGI and the Karnataka High Court.
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