DLF Home Developers Limited Vs Sales Tax Officer
Date: September 3, 2024
Court: High Court
Bench: Delhi
Type: Writ Petition
Subject Matter
Different authorities cannot conduct simultaneous investigations into the same issue under the GST regime
Summary
In this case law, the petitioner is challenging an order dated December 30, 2023, issued by Respondent No. 1, which upholds a demand of ₹28,79,06,786, including interest and penalties. This demand was raised under Section 73 of both the Central Goods and Services Tax Act, 2017, and the Delhi Goods and Services Tax Act, 2017, for the tax period from July 2017 to March 2018. The petitioner has partially accepted this demand but contests the amount concerning input tax credit (ITC) reversals on non-business transactions and exempt supplies. A key issue arises from the fact that the Directorate General of GST Intelligence (DGGI) issued a show cause notice on February 2, 2024, regarding the same tax period and similar issues, leading the petitioner to argue that two authorities cannot simultaneously pursue this matter. The impugned order acknowledged this concern by indicating a lack of jurisdiction to adjudicate on demands that are also subject to ongoing proceedings by the DGGI. Respondent No. 1's counsel conceded that the contested demand regarding ITC reversals should be set aside, as the matter will be adjudicated by the DGGI. As a result, the court directed that the demand in question be set aside, allowing the pending application to be disposed of appropriately. The court clarified that the relevant authority is to address the issue as defined in the DGGI's show cause notice.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present petition, inter alia, impugning the order dated 30.12.2023 (hereafter the impugned order) passed by respondent no.1 to the limited extent that it confirms the demand of₹28,79,06,786/ – including interest and penalty. The said order has been passed under Section 73 of the Central Goods and Services Tax Act, 2017 and the Delhi Goods and Services Tax Act, 2017 in respect of tax period from July 2017 to March 2018. The petitioner has partly accepted the demand raised and is contesting certain demands.
2. The present petition is confined only to the demand in respect of ITC to be reversed on non-business transactions and exempt supplies. The petitioner’s challenge to the said demand is premised on the basis that the Directorate General of GST Intelligence (hereafter the DGGI) has also issued a show cause notice dated 02.02.2024 for the tax period 01.07.2017 to 31.03.2021, which also includes the demand proposed on the aforesaid issue. It is the petitioner’s case that two authorities cannot proceed simultaneously in respect of the same issue.
3. The impugned order indicates that respondent no.1 is also fully conscious of the same and therefore, it has proceeded to confirm the demand without adjudicating the The relevant extract of the impugned order is set out below :-
“………..
On ITC to be reversed on non-business transactions & exempt supplies: The taxpayer has informed that the proceeding under the subject has already been taken up by DGGI (HQ), New Delhi had referred section 6(2)(b) of CGST Act 2017 and stated that parallel proceeding cannot be started. Deputy Director Investigation (INV-DGGI (HQ) New Delhi vide letter no DGGI/INV/GST/2722-2023/INV/o/o/Pr.OGG(HQ)/2028 dated 20.12.2023DGGI (HQ) has acknowledge the fact. Since the proceeding on the issue at being executed by DGGI (HQ), New Delhi, the demand raised through DRC01 sands as it is.”
4. We find merit in the contention that respondent no.1 cannot adjudicate a demand, which is also the subject matter of other proceedings. Since, the period covered under the impugned order is also subsumed in the show cause notice issued by the DGGI, both the proceedings cannot be carried on simultaneously.
5. Mr. Rajeev Aggarwal, the learned counsel appearing for respondent no.1 states, on instructions, that the demand, in respect of ITC to be reversed on non-business transactions and exempt supplies, be set aside as the same would be adjudicated by the DGGI.
6. In view of the above, the impugned demand is required to be set aside to the extent as noted above. It is so directed.
7. It is clarified that the concerned Authority shall adjudicate the said issue pursuant to a show cause notice dated 02.02.2024 issued by the DGGI.
8. The present petition is allowed in the aforesaid The pending application is also disposed of.