Civil Writ Jurisdiction Case No.809 of 2026

Facts of the Case

Morlatis Engineering and Construction Private Limited, registered under the Central/Bihar GST Act with Form GST REG-06 registration dated 07.02.2019, received multiple notices and summonses from the Directorate General of GST Intelligence (DGGI), Meerut and Patna Zonal Units, in connection with an inquiry into fake input tax credit availment. The State respondent had separately issued intimations under Section 74(5) of the Act comparing GSTR-3B and GSTR-2B data, alleging excess ITC of approximately Rs.34.77 lakh for FY 2023-24 (totalling Rs.71.21 lakh with interest and penalty) and about Rs.87.08 lakh for FY 2024-25 (totalling Rs.1.75 crore), followed by show cause notices under Section 74. The petitioner challenged multiple summonses under Section 70 issued in the same subject matter as contrary to Section 6(2) of the Act and a CBIC circular, and sought a stay on recovery pending final determination, before the Patna High Court.

Issues Involved

  1. Whether the multiple summonses issued by the DGGI in the same subject matter contravened Section 6(2) of the CGST/Bihar GST Act and the applicable CBIC circular on cross-empowerment.
  2. Whether the summonses, issued under Section 70 in connection with a fake ITC-availment inquiry, were validly issued by the proper officer.
  3. Whether the writ court should interfere with, or stay, an ongoing DGGI investigation.

Petitioner's Arguments

  • Counsel submitted that multiple summonses and notices on the same subject matter, issued over a long span of time by different authorities, were improper and violated the statutory bar on parallel proceedings under Section 6(2) of the Act.
  • It was contended that recovery of the disputed demand, whether through voluntary payment via GST DRC-03 or otherwise, should be stayed pending culmination of the proceedings.

Respondent's Arguments

  • The CGST authorities submitted that the summonses were issued under Section 70 by the Senior Intelligence Officer, DGGI, in a bona fide inquiry into availment of fake input tax credit, seeking the Director's attendance and production of purchase ledgers, bills and bank account records for the period 01.07.2017 onwards.

Court Order / Findings

  • On perusal of the impugned summonses, the Court found they had been issued under Section 70 of the Act by the proper officer, who is empowered to summon any person to give evidence or produce documents in an enquiry, in the same manner as under the Code of Civil Procedure.
  • The Court held that any interference with the summonses at this stage would only amount to scuttling the ongoing inquiry, and declined to find any impropriety warranting intervention.
  • Finding the writ application devoid of merit, the Court dismissed it with costs of Rs.25,000, payable to the Patna High Court Legal Services Committee within one month.

Important Clarification

  • Multiple summonses issued in the course of a single ongoing DGGI investigation, seeking documents and attendance for the enquiry, do not by themselves offend the bar on parallel proceedings under Section 6(2) so long as they are issued by the proper officer under Section 70 for the purpose of that inquiry.
  • Writ courts are reluctant to interfere with an investigative summons at a preliminary stage, since doing so risks derailing a legitimate revenue inquiry into alleged fake ITC availment, and a meritless challenge risks an award of costs.

Sections Involved

  • Section 70, CGST Act, 2017 — power to summon persons to give evidence and produce documents.
  • Section 6(2), CGST Act, 2017 — bars initiation of parallel proceedings by Central and State tax authorities on the same subject matter.
  • Section 74, CGST Act, 2017 — determination of tax where ITC has been wrongly availed by reason of fraud or suppression.

Decision – In Favour of

The decision is in favour of the Department, with the writ application dismissed with costs of Rs.25,000 and the summonses upheld as validly issued.

Case Details

Court: High Court of Judicature at Patna
Case Number: Civil Writ Jurisdiction Case No.809 of 2026
Coram: Hon'ble Mr. Justice Rajeev Ranjan Prasad and Hon'ble Justice Smt. Soni Shrivastava
Date of Order: 23.04.2026

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