The bench of Justice Gopinath P. observed that “The term ‘commencement of proceedings’ undoubtedly refers to the issuance of notice under the provisions of the CGST/SGST Acts and initiation of investigation or issuance of summons under section 70 of the CGST/SGST laws cannot be carried out. be deemed to be initiation of proceedings for the purposes of Section 6(2)(b) of the CGST/SGST Acts.

Section 70 of the Central Goods and Services Tax Act, 2017 sets forth the law regarding the power of the officer to summon any person before him to furnish documentary evidence on any specific matter.

Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 prohibits separate initiation of proceedings on the same subject by the competent officer under the CGST Act when a proceeding on the same subject by the competent officer under the State law has been initiated, while the Section 70 of the CGST Act.

In this case, the Competent Officer under the Central Goods and Services Tax Act, 2017 initiated an investigation regarding non-payment of GST and ordered production of certain documents, followed by summons issued under section 70 of the CGST Act. Thereafter, the State Authority initiated proceedings under Section 74 read with Section 122(1) of the CGST/SGST Acts.

The assessee/petitioner has contended that the proceedings initiated by the State authority are not viable under Section 6 of the CGST/SGST Acts. According to them, once a procedure is initiated by an authority, it must be concluded by that same authority. Since the Central Authority had already initiated proceedings in 2018, including issuing summons and recording statements, the assessee submits that only the Central Authority could have issued a show cause notice under section 74 , and not the authority of the State.

The ministry mentioned the case of GK Trading Company v. Union from India and others and argued that the term “opening of a procedure” in Article 6 must be interpreted as the beginning of the procedure by the issuance of a notice and any investigation or summons issued within the framework of the investigation cannot be considered as the opening of the procedure.

The court, after referring to Section 6(2) of the CGST Act, observed that when a competent officer under the State Goods and Services Tax Act or the Act on Union Territory Goods and Services Tax has initiated proceedings on any subject, no proceedings shall be initiated by the competent officer under the CGST Act on the same subject.

Disagreeing with the assertions of the assessee, the bench said “The term ‘commencement of proceedings’ undoubtedly refers to the issuance of notice under the provisions of the CGST/SGST Acts and initiation of investigation or issuance of summons under section 70 of the CGST/SGST laws cannot be carried out. be deemed to be initiation of proceedings for the purposes of Section 6(2)(b) of the CGST/SGST Acts.

The judiciary mentioned the case of GK Trading Company v. Union of India and Others (AIRONLINE 2020 ALL 2678) where it took place that “………The word “investigation” in Article 70 has a particular connotation and a specific objective: to summon any person whose presence may be deemed necessary by the competent officer either to give evidence, or to produce a document or any other thing. It cannot be mixed with certain statutory measures which may precede or follow the progress of the investigation or the conclusion thereof. The process of investigation under Section 70 is specific and unified by the very purpose for which the provisions of Chapter XIV of the Act confer power on the competent officer to conduct an investigation. The word “investigation” in Section 70 is not synonymous with the word “proceeding” in Section 6(2)(b) of the UPGST Act/CGST Act.