Whether two parallel proceedings in respect of the same period are permissible?

By CA Ritesh Arora, Vice Chairman & NICASA Chairman, ICAI – Amritsar Branch 24-25

No, the Honorable Guwahati High Court in the case of Subhash Agarwalla v. State of Assam [Case No. WP(C)/ 683/2024 dated February 12, 2024] held that once a proceeding is initiated either in the Central Goods and Services Tax Act, 2017 or the State Goods and Services Tax Act, 2017, another proceeding for the same period under other Act cannot be initiated. Therefore, the operation of the Order-in-Original was to remain suspended till the returnable date.

The Honorable Guwahati High Court observed that Section 6(2) of the CGST and SGST Act which inter alia indicates that once a proceeding is initiated either of the above two acts, another proceeding for the same period under the other Act is not to be initiated, the operation of the impugned Order shall remain suspended till the returnable date.

Author’s Comments:

As per Section 5(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 statue places is regarding proceedings based on the same cause-of-action and same subject matter (in a few circumstances, even for the same cause-of-action, parallel proceedings are permissible).

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