The Jharkhand High Court in the case of VIVEK NARSARIA VERSUS THE STATE OF JHARKHAND vide Order No.- W.P(T) NO. 4491 of 2023 dated 15.01.2024, addresses the cases where taxpayers are being investigated by both state and central GST authorities and the DGGI. The High Court held that Directorate General of Goods and Services Tax Intelligence (DGGI) does not enjoy any special power or privilege compared to the officers of the state GST authorities, if they are investigating the same taxpayer for the same offence. The Petitioner cannot be made to succumb to the jurisdiction of all the three departments and as such, the attachment also is bad in law.

In this case, the petitioner is carrying on the business of trading of Iron & Steels and Cements, since 2017-18. It was submitted that the purchases and sales are duly reflected in the GST returns furnished by the Petitioner and the outward tax liability is adjusted against the Input Tax Credit available to the Petitioner.  On 16.03.2023, an inspection was carried out by the Intelligence Bureau of the State Goods & Service Tax, and in terms thereof GST INS-01 has been issued and after the inspection is concluded, the GST Officers fixed the date for furnishing books of accounts. Subsequent to this, the Petitioner was  served with a notice dated 10.04.2023 by the Central GST officers with a direction to reverse the Input Tax Credit along with interest and penalty on account of alleged purchases from the non-existent entity.

Further, a search was carried out by the DGGI, Intelligence Branch of CGST on 06.06.2023. The DGGI froze seven bank accounts of the entity concerned, prior to any determination or finding of any irregular/inadmissible/wrong availment of Input Tax Credit. The Petitioner relied upon the provisions of Section 6(2)(b) of the CGST Act, supported by a clarification issued on 5.10.2018, and stated that once the State GST authorities initiated proceedings, subsequent notices from other tax wings, namely Central Goods & Services Tax and DGGI, should be quashed.

The DGGI defended its actions, asserting that the investigations were initiated at the central level in response to a larger operation targeting a “Fake GST Invoicing Gang” at Noida. The DGGI argued that its jurisdiction, guided by Section 6 of the CGST Act and relevant clarifications, empowered it to conduct investigations irrespective of the taxpayer’s administrative assignment.

Issue: Since , the petitioner has received summons from 3 Departments of GST, the petitioner has approached this Court, seeking a declaration that the authority who has initiated the proceedings prior in point of time, shall be the only authority to carry out the proceedings.

Held: