The Calcutta High Court in the case of TRUVOLT ENGINEERING COMPANY PVT. LTD. & ANR. VERSUS THE ADDITIONAL ASSISTANT DIRECTOR, DIRECTOR GENERAL OF GST INTELLIGENCE & ORS. vide Case No.- WPA 2606 of 2025 dated 16.06.2025, restrained DGGI from Parallel GST Investigation Where State Audit Already Concluded. The Court held that since the State GST authorities have already conducted a search and seizure, and that proceeding remains pending, the DGGI should not proceed for the same tax period.
Facts of the Case: In this case, the petitioner challenged the initiation of an investigation by DGGI through notices dated 21/22 November 2024 and 30 May 2025. The petitioner contended that an audit under Section 65 of the CGST/WBGST Act had already been concluded by the State GST authorities for FY 2019–20 to FY 2021–22, culminating in a show cause notice dated 29 November 2024. Additionally, the State had already initiated a search and seizure proceeding under Section 67 for the period FY 2022–23 to FY 2024–25, evidenced by a panchnama dated 22 August 2024.
It was argued that such parallel proceedings for the same period by multiple authorities are unjustified and excessive.
The DGGI contended that there was no statutory bar against a separate central investigation and that the allegations involved fraudulent transactions warranting independent action.
The State Government acknowledged that search and seizure proceedings had been initiated but not yet concluded.
Issue: Whether a second investigation/search and seizure by the DGGI (Central GST authorities) can be initiated for the same tax periods which are already subject to an audit or search by the State GST authorities u/s 65 and 67.
Held that: The Court stated that while the CGST Act does not expressly bar parallel proceedings under different chapters u/s 65, 66 and 67, such multiple simultaneous proceedings for the same period are not ideal, particularly when one authority has already issued a show cause notice.
The Court observed that once an audit is concluded under Section 65(7) and a show cause notice is issued, the same person should not be exposed to multiple overlapping proceedings unless the prior action is brought to a logical conclusion.
The Court, therefore, held that the DGGI should not proceed further for periods already covered by the State’s ongoing investigation. The DGGI may restrict its enquiry to periods not already covered by the State proceedings. All further steps by DGGI will be subject to the outcome of this writ petition. The matter was not finally decided, and directions were issued for filing of affidavits by the respondents within six weeks, with liberty to mention the matter for final hearing thereafter.
To read the complete judgment 2025 Taxo.online 1193
