TLI Staff
New Delhi: The Central and the State GST authorities cannot go after taxpayers and launch parallel enquiries in the same case.
While Central Board of Indirect Taxes and Customs (CBIC) had clarified the same in a circular last year, the latest Gujarat High Court order on the issue has come as a major relief for trade and business registered under Goods and Services Tax (GST).
In Sureshbhai Gadhecha, proprietor of Anmol Traders versus State of Gujarat case, the Gujarat High Court this week restrained state GST officers from taking any coercive action against the firm pending enquiry by the central GST authorities.
“Having regard to the submissions advanced by the learned counsel for the petitioner, issue notice returnable on 23rd January, 2020,” Justice Harsha Devani said in the oral order on December 27.
“By way of ad-interim relief, the respondents are restrained from taking any coercive action against petitioner pursuant to the impugned inquiry proceedings,” Justice Devani added.
The counsel of the petitioner submitted that there cannot be two parallel investigations under the State Act as well as the Central Act.
In a clarification issued on October 5, 2018 the CBIC had said that if an officer of the Central tax authority initiates intelligence-based enforcement action against a taxpayer administratively assigned to State tax authority, the officers of Central tax authority would not transfer the said case to its State tax counterpart and would themselves take the case to its logical conclusions.
“Similar position would remain in case of intelligence-based enforcement action initiated by officers of State tax authorities against a taxpayer administratively assigned to the Central tax authority,” it further clarified.
Rajat Mohan, Senior Partner, AMRG & Associates hailed the Gujarat HC order saying it eliminates any scope of confusion.
“It is certainly welcome development. It brings greater clarity on jurisdiction of tax authorities,” Mohan said.