Facts of the Case

Neeraj Jain, a resident of Kolkata, West Bengal, was issued two summons under Section 70 of the CGST/SGST Acts — one by the Assistant Commissioner of State Tax (Investigation), Raigad Division, Maharashtra, and another by the Directorate General of GST Intelligence (DGGI), Patna Zone. Both summoned him as a witness in relation to transactions between two entities: M/s. Vedam Enterprises, a Maharashtra-registered supplier later found to have a fictitious registration, and M/s. Arti Plastics, a Bihar-registered purchaser that had claimed input tax credit on purchases from Vedam Enterprises. The petitioner, alleged to be the intermediary or "go-between" in these dealings, challenged the parallel summons on the ground that simultaneous proceedings by Central and State authorities on the same subject matter were barred.

Issues Involved

  1. Whether simultaneous summons issued under Section 70 by the Central and State GST authorities amount to parallel "proceedings on the same subject matter" barred by Section 6(2)(b) of the CGST Act.
  2. Whether the CBEC Circular dated 05.10.2018 required one authority to stay its hands once the other had initiated action.
  3. Whether the petitioner, summoned only as a witness rather than as the person under investigation, could invoke the cross-empowerment bar at all.

Petitioner's Arguments

  • Argued that Section 6 of the CGST Act barred the Central and State authorities from initiating and continuing proceedings simultaneously on the same subject matter.
  • Relied on the CBEC Circular dated 05.10.2018 to contend that whichever authority initiated action first must complete it while the other stays its hands.
  • Cited the Gujarat High Court's decision in Bhawani Textiles v. Additional Director General and the Delhi High Court's decision in Indo International Tobacco Ltd. v. Vivek Prasad to argue that parallel summons from Central and State GST wings were impermissible.
  • Also pointed to the illness of his wife as a practical difficulty, and raised concern about being asked to produce the same documents twice before two different authorities.

Respondent's Arguments

  • The Additional Solicitor General submitted that the investigations targeted two distinct assessees — Vedam Enterprises in Maharashtra and Arti Plastics in Bihar — and that the petitioner was summoned only as a witness, not as a person under investigation himself.
  • Since no proceeding under Section 67, 73 or 74 had been initiated against the petitioner, Section 6(2)(b)'s bar on overlapping "proceedings on the same subject matter" was not attracted; a Section 70 summons for evidence stands on a different footing.

Court Order/Findings

  • The Court held that Section 6(2)(b) of the CGST Act bars only overlapping adjudicatory "proceedings" — such as assessment, demand or penalty proceedings — on the same subject matter, and does not extend to a Section 70 summons issued merely "in any inquiry."
  • Following the Delhi High Court's reasoning in Indo International Tobacco Ltd., the Court held that Section 6 and the 2018 Circular have limited application confined to preventing overlapping jurisdiction, not every situation arising during investigation.
  • Since no proceeding had been initiated against the petitioner himself, and he was summoned only to produce records as a witness, there was no infirmity in parallel summons by both authorities.
  • The petitioner's difficulty in producing the same documents twice was, however, accommodated by directing revised appearance dates — Maharashtra in December 2023 and Patna in November 2023 — with authenticated copies to be shared between authorities.

Important Clarification

  • The bar under Section 6(2)(b) of the CGST/SGST Acts applies only to overlapping adjudicatory proceedings on the same subject matter between a taxpayer and the tax administration — it does not prevent both Central and State authorities from independently summoning the same individual as a witness under Section 70.
  • A person who is not himself the subject of investigation, but is summoned to give evidence regarding transactions of other assessees, cannot invoke the cross-empowerment bar meant to protect taxpayers from duplicate proceedings against themselves.

Sections Involved

  • Section 70, CGST/SGST Act, 2017 — empowers the proper officer to summon any person to give evidence or produce documents in an inquiry.
  • Section 6, CGST Act, 2017 — provides for cross-empowerment of Central and State officers and, under sub-section 2(b), bars a fresh proceeding on the same subject matter once one authority has initiated it.
  • Sections 67, 73 and 74, CGST Act, 2017 — deal with search and seizure, and determination of tax not paid by reasons other than fraud (Section 73) or by fraud or suppression (Section 74), the kind of adjudicatory proceedings to which Section 6(2)(b) applies.

Decision – In Favour of

The writ petition was dismissed, and the decision is in favour of the Department — the cross-empowerment bar was held inapplicable to a witness summons. The Court did, however, partially accommodate the petitioner by directing revised appearance timelines so the same documents would not have to be produced twice in overlapping months.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Judicature at Patna
  • Case No.: Civil Writ Jurisdiction Case No.7599 of 2023
  • CNR: Not available on record
  • Coram: Hon'ble the Chief Justice (K. Vinod Chandran, CJ) and Hon'ble Mr. Justice Rajiv Roy
  • Decision Date: 10.10.2023
  • Disposal Nature: Dismissed; petitioner directed to appear before both Central and State GST authorities pursuant to summons, with revised timelines

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