Whether Audit proceedings by the SGST Authority can continue if the same subject matter is pending before the SGST Authority?

No, the Honorable High Court of Calcutta in the case of Mahabir Prasad Kedia v. Assistant Commissioner of State Tax [MAT No. 2388 of 2023 dated 09.01.2024] held that the Audit Wing of the State Goods and Services Tax Authority should keep the proceedings in abeyance if the subject matter was pending before the Central Goods and Services Tax Department.

Author’s Comments

As per Section 6(2)(b) of the CGST Act, if a proper officer under the SGST Act or the UTGST Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter. In the considered opinion of the author, there is no bar under the law that once a proceeding is initiated for a particular period by the CGST department, no proceedings can be issued by the SGST or UTGST authorities for the same period. The only bar that the statute places is regarding proceedings based on the same cause-of-action and the same subject matter (in a few circumstances, even for the same cause-of-action, parallel proceedings are permissible).

Important to highlight here is that cross-empowerment is allowed for proceedings carried out under section 67 only and for the rest of the proceedings, where there is no evasion of the tax involved, the Proper Officer to issue Show Cause Notice under section 73/74 is the jurisdictional officer (either CGST or SGST).