# M/S G.K. Trading Co., Ghaziabad v. Union of India & Ors

- **Citation:** (2021) 1 ILRA 706
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-12-02
- **Case number:** Writ Tax No. 666 of 2020
- **Bench:** Surya Prakash Kesarwani, Dr. Yogendra Kumar Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-g-k-trading-co-ghaziabad-v-union-of-india-ors-46121
- **Pages:** 10

## Headnote

(A) Civil Law - U.P. GST Act, 2017/ CGST
Act, 2017: Section 2(91), 4(2), 6(2)(b),
67 to 72

The word "inquiry" in Section 70 has a special
connotation
and
a
specific
purpose
to
summon any person whose attendance may
be considered necessary by the proper officer
either to give evidence or to produce a
document or any other thing. The word
"inquiry" in Section 70 is not synonymous
with the word "proceedings", in Section
6(2)(b) of the U.P.G.S.T Act/C.G.S.T Act.

The words "any proceedings" on the "same
subject matter" used in Section 6(2)(b) of the
Act, which is subject to conditions specified in
the notification issued under sub-section (1);
means any proceeding on the same cause of
action and for the same dispute involving
some adjudication proceedings which may
include assessment proceedings, proceedings
for penalties etc., proceedings for demand
and recovery under Section 73 and 74 etc.

Section 6(2)(b) of the C.G.S.T. Act prohibits a
proper officer under the Act to initiate any
proceeding on a subject-matter where on the
same subject-matter proceeding by a proper
officer under the U.P.G.S.T. Act has been
initiated.

It has been observed that there is no
proceeding by a proper officer against the
petitioner
on
the
same
subject-matter
referable to Section 6(2)(b) of the U.P.G.S.T.
Act. It is merely an inquiry by a proper officer
under Section 70 of the C.G.S.T. Act. (Para
19)

Writ Petition Rejected. (E-8)

List of Cases cited :-

## Text

706 INDIAN LAW REPORTS ALLAHABAD SERIES

17. Subject to aforesaid observations,
the writ petition is dismissed.
----------
(2021)01ILR A706
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.12.2020

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ Tax No. 666 of 2020

M/S G.K. Trading Co., Ghaziabad
 ...Petitioner
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioners:
Sri Praveen Kumar

Counsel for the Respondents:
A.S.G.I., C.S.C., Ramesh Chandra Shukla,
Sri C.B. Tripathi

(A) Civil Law - U.P. GST Act, 2017/ CGST
Act, 2017: Section 2(91), 4(2), 6(2)(b),
67 to 72

The word "inquiry" in Section 70 has a special
connotation
and
a
specific
purpose
to
summon any person whose attendance may
be considered necessary by the proper officer
either to give evidence or to produce a
document or any other thing. The word
"inquiry" in Section 70 is not synonymous
with the word "proceedings", in Section
6(2)(b) of the U.P.G.S.T Act/C.G.S.T Act.

The words "any proceedings" on the "same
subject matter" used in Section 6(2)(b) of the
Act, which is subject to conditions specified in
the notification issued under sub-section (1);
means any proceeding on the same cause of
action and for the same dispute involving
some adjudication proceedings which may
include assessment proceedings, proceedings
for penalties etc., proceedings for demand
and recovery under Section 73 and 74 etc.

Section 6(2)(b) of the C.G.S.T. Act prohibits a
proper officer under the Act to initiate any
proceeding on a subject-matter where on the
same subject-matter proceeding by a proper
officer under the U.P.G.S.T. Act has been
initiated.

It has been observed that there is no
proceeding by a proper officer against the
petitioner
on
the
same
subject-matter
referable to Section 6(2)(b) of the U.P.G.S.T.
Act. It is merely an inquiry by a proper officer
under Section 70 of the C.G.S.T. Act. (Para
19)

Writ Petition Rejected. (E-8)

List of Cases cited :-

1. Liberty Oil Mills & ors. Vs U.O.I. & ors.
(1984) 3 SC 465

2. Ballabh Das Vs Dr. Madan Lal & ors. (1970)
1 SCC 761

(Delivered by Hon'ble Surya Prakash
Kesarwani, J. & Hon'ble Dr. Yogendra
Kumar Srivastava, J.)

1. Heard Sri Praveen Kumar, learned
counsel for the petitioner and Sri C. B.
Tripathi, learned special counsel for the
Union of India.

2. This writ petition has been filed
praying for the following relief:-

(i) To issue a writ, order or
direction in the nature of mandamus
commanding the respondent nos. 3 and 4
not to proceed with any inquiry against the
petitioner and to talk any coercive steps
against the petitioner, in pursuance of the
impugned summoned.

(ii) To issue any other suitable
writ, order or direction which the Hon'ble
1 All. M/S G.K. Trading Co., Ghaziabad Vs. Union of India & Ors.
707
Court may deem fit and proper under the
facts and circumstances of the case.

(iii) To award costs of the petition
to the petitioner.

Submissions:-

3. Sri Praveen Kumar, learned
counsel for the petitioner submits as
under:-

(i)
The
respondent
no.5
has
inspected the business premises of the
petitioner on 30.05.2018, which was
followed by a summon dated 02.06.2018
under Section 70 of the U.P. GST Act.
Lastly, a summon dated 14.09.2020 was
issued by the respondent no.5- Assistant
Commissioner (SIB), Commercial Tax,
Range-C, Ghaziabad under Section 70 of
U.P. GST Act, requiring the petitioner to
explain two input tax credit taken by him.

(ii) After the aforesaid summon
dated
02.06.2018
issued
by
the
respondent no.5, the respondent no.4 has
issued summon dated 24.07.2019 under
Section 70(1) of CGST Act, 2017,
requiring the petitioner to tender his
statement in the inquiry. The aforesaid
summon was followed by summons dated
26.08.2019 and 26.08.2020.

(iii) Once inquiry has been initiated
by the respondent no.5 under U.P. GST
Act, the respondent nos. 3 and 4 cannot
initiate any proceeding in view of the
provisions of Section 6 (2) (b) of U.P.
GST Act, 2017.

(iv) Since inquiry has already been
initiated
by
the
respondent
no.5,
therefore, the respondent nos. 3 and 4
cannot initiate any inquiry against the
petitioner in view of the provisions of
Section 6(2)(b) of U.P. GST Act, 2017.

4. Sri C.B. Tripathi, learned special
counsel for the State-respondents submits
as under:-

(i) Section 6 (2) (b) of U.P. GST
Act, 2017 prohibits initiation of a
proceeding on the same set of facts. It
does
not
prohibit
inquiry
by
the
authorities under U.P. Act or under
Central Act.

(ii) In Section 70 of CGST Act the
word "Inquiry" has been used while in
Section 6(2)(b) of U.P. GST Act, 2017
the words " Proceeding" has been used.
Thus
Section
6
(2)(b)
prohibits
"Proceeding" and not "Inquiry". In other
words "Inquiry" has not been prohibited
under Section 6(2)(b) of the U.P. GST.
Act, 2017.

(iii) Jurisdiction of the respondent
nos. 2 and 5 under U.P. GST Act is only
the State of U.P., while the jurisdiction
under the Central Act, is whole of India.

(iv) The subject matter of inquiry by
the respondent Nos 3/4 under the CGST
Act is different or wider than the subject
matter of inquiry by the respondent No. 5
under the U.P. GST Act. The inquiry by
the respondent No.5 is confined only to
some incriminating material found in the
survey
dated
30.05.2018
and
the
evidences of Input Tax Credit illegally
taken by the petitioner on the basis of
invoices of two alleged dealers. No such
facts are indicated in the summon issued
by the respondent Nos.3/4. Thus, even
the inquiry is not on the same set of facts.

5. We have carefully considered the
submissions of learned counsels for the
parties.

Facts:-
708 INDIAN LAW REPORTS ALLAHABAD SERIES

6. Briefly stated facts of the present
case are that the petitioner had obtained
registration in Form GSTREG-06 under the
U.P. GST Act, 2017 and the Registration
Rules, w.e.f. 01.11.2017 for trade in Iron
Bars and Rods and Non-Alloy Steel etc.
etc.
On
30.05.2018,
a
survey
was
conducted by the respondent No.5 at the
business premises of the petitioner in which
no
business
activity
was
found.
Consequently,
the
respondent
No.5
(Deputy Commissioner, S.I.B.) issued a
summon to the petitioner dated 02.06.2018
under Section 70 of the U.P. GST Act
requiring
him
to
submit
details
of
purchases and sales, list of buyers and
sellers and certain other documents. The
Assistant
Commissioner
(SIB),
Commercial Tax, Range-C, Ghaziabad
issued a summon to the petitioner dated
14.09.2020 under Section 70 of the Act
asking him to submit explanation with
respect to certain input tax credits taken by
him including the input tax credit taken on
the basis of invoices M/s Glider Traders
Private
Ltd.,
whose
registration
was
cancelled several months prior to the date
of the alleged invoice.

7. It appears that some inquiry was
being conducted by the Directorate General
of Goods and Services Tax Intelligence,
Meerut Zonal Unit, Meerut, which issued
summons dated 24.07.2019 to the petitioner
under Sections 70 and 174 of the CGST
Act, 2017 requiring the petitioner to appear
in person on 25th or 26th July, 2019 at
12.00 hours to tender statement in person,
but the petitioner has not responded to the
summon.
Another
summon
dated
26.08.2019 was issued to the petitioner by
the respondent No.4 requiring the petitioner
to submit copies of Invoices issued along
with transport documents since July, 2017
till date, copies of invoices issued by
suppliers and transport documents since
July, 2017 till date, copies of purchase
ledgers since July, 2017 till date, copies of
Sales ledgers since July, 2017 till date,
copies of Liability ledgers of ITC claimed
and Cash deposited since July, 2017 till
date
and
copies
of
Balance
Sheet,
Profit/Loss account for the Financial year
2017-18 and 2018-19. However, the
petitioner
has
not
submitted
any
information. Therefore, the respondent
No.3 again issued a summon dated
26.08.2020 to the petitioner under Section
70 of the CGST Act, 2017 requiring him to
tender
statement,
give
evidence
and
produce copies of purchase and sales
ledgers since July, 2017 till date. It appears
that pursuant to the aforesaid summon, the
petitioner neither appeared before the
respondent No.4 nor submitted any details
and instead merely wrote a letter dated
11.09.2020 that detail inquiry is being
conducted by the respondent No.5. Now,
the petitioner has filed the present writ
petition praying for the relief as aforequoted.

Discussion and Findings:-

8. Provisions of the U.P. GST Act and
the CGST Act are almost pari materia. For
the purposes of the controversy involved in
the present writ petition, the relevant
provisions are Sections 2(91), 4(2), 6(2)(b)
and Chapter XIV (Section 67 to 72) of the
Uttar Pradesh Goods and Services Tax Act,
2017 which are reproduced below:-

"Section 2. In this Act, unless the
context otherwise requires--

2 (91) " Proper Officer" in relation to
any function to be performed under this
Act, means the Commissioner or the
officer of the State Tax who is assigned
that function by the Commissioner.
1 All. M/S G.K. Trading Co., Ghaziabad Vs. Union of India & Ors.
709

Section 4 (2) The Commissioner shall
have jurisdiction over the whole of the
State, the Special Commissioner and an
Additional Commissioner in respect of all
or any of the functions assigned to them,
shall have jurisdiction over the whole of the
State or where the State Government so
directs, over any local area thereof, and all
other officers shall, subject to such
conditions as may be specified, have
jurisdiction over the whole of the State or
over such local areas as the Commissioner
may, by order, specify.

Section 6 (2) Subject to the conditions
specified in the notification issued under
sub-section (1),-

(a) where any proper officer issues an
order under this Act, he shall also issue an
order under the Central Goods and
Services Tax Act, 2017 as authorised by the
said
Act
under
intimation
to
the
jurisdictional officer of central tax;

(b) where a proper officer under the
Central Goods and Services Tax Act,2017
has initiated any proceedings on a subjectmatter, no proceedings shall be initiated
by the proper officer under this Act on the
same subject- matter.

Chapter XIV (Inspection, Search,
Seizure and arrest)

Section 67. Power of inspection,
search and seizure- (1) Where the proper
officer, not below the rank of Joint
Commissioner, has reasons to believe that-
-

(a) a taxable person has suppressed
any transaction relating to supply of goods
or services or both or the stock of goods in
hand, or has claimed input tax credit in
excess of his entitlement under this Act or
has indulged in contravention of any of the
provisions of this Act or the rules made
thereunder to evade tax under this Act; or

(b) any person engaged in the business
of transporting goods or an owner or
operator of a warehouse or a go down or
any other place is keeping goods which
have escaped payment of tax or has kept
his accounts or goods in such a manner as
is likely to cause evasion of tax payable
under this Act, he may authorise in writing
any other officer of State tax to inspect any
places of business of the taxable person or
the persons engaged in the business of
transporting goods or the owner or the
operator of warehouse or go down or any
other place.

(2) Where the proper officer, not
below the rank of Joint Commissioner,
either pursuant to an inspection carried out
under sub-section (1) or otherwise, has
reasons to believe that any goods liable to
confiscation or any documents or books or
things, which in his opinion shall be useful
for or relevant to any proceedings under
this Act, are secreted in any place, he may
authorise in writing any other officer of
State tax to search and seize or may himself
search and seize such goods, documents or
books or things:

Provided
that
where
it
is
not
practicable to seize any such goods, the
proper officer, or any officer authorized by
him, may serve on the owner or the
custodian of the goods an order that he
shall not remove, part with, or otherwise
deal with the goods except with the
previous permission of such officer:

Provided further that the documents
or books or things so seized shall be
retained by such officer only for so long as
may be necessary for their examination and
for any inquiry or proceedings under this
Act.

(3) The documents, books or things
referred to in sub-section (2) or any other
documents, books or things produced by a
taxable person or any other person, which
have not been relied upon for the issue of
notice under this Act or the rules made
710 INDIAN LAW REPORTS ALLAHABAD SERIES
thereunder, shall be returned to such
person within a period not exceeding thirty
days of the issue of the said notice.

(4) The officer authorised under subsection (2) shall have the power to seal or
break open the door of any premises or to
break open any almirah, electronic devices,
box, receptacle in which any goods,
accounts, registers or documents of the
person are suspected to be concealed,
where access to such premises, almirah,
electronic devices, box or receptacle is
denied.

(5) The person from whose custody
any documents are seized under subsection (2) shall be entitled to make copies
thereof or take extracts therefrom in the
presence of an authorised officer at such
place and time as such officer may indicate
in this behalf except where making such
copies or taking such extracts may, in the
opinion of the proper officer, prejudicially
affect the investigation.

(6) The goods so seized under subsection (2) shall be released, on a
provisional basis, upon execution of a bond
and furnishing of a security, in such
manner and of such quantum, respectively,
as may be prescribed or on payment of
applicable
tax,
interest
and
penalty
payable, as the case may be.

(7) Where any goods are seized under
sub-section (2) and no notice in respect
thereof is given within six months of the
seizure of the goods, the goods shall be
returned to the person from whose
possession they were seized:

Provided that the period of six months
may, on sufficient cause being shown, be
extended by the proper officer for a further
period not exceeding six months.

(8) The Government may, having
regard to the perishable or hazardous
nature of any goods, depreciation in the
value of the goods with the passage of time,
constraints of storage space for the goods
or any other relevant considerations, by
notification, specify the goods or class of
goods which shall, as soon as may be after
its
seizure
under
sub-section(2),
be
disposed of by the proper officer in such
manner as may be prescribed.

(9) Where any goods, being goods
specified under sub-section (8), have been
seized by a proper officer, or any officer
authorised by him under sub-section (2), he
shall prepare an inventory of such goods in
such manner as may be prescribed.

(10) The provisions of the Code of
Criminal Procedure, 1973 (2 of 1974),
relating to search and seizure, shall, so far
as may be, apply to search and seizure
under
this
section
subject
to
the
modification that sub-section (5) of section
165 of the said Code shall have effect as if
for the word "Magistrate", wherever it
occurs, the word "Commissioner" were
substituted.

(11) Where the proper officer has
reasons to believe that any person has
evaded or is attempting to evade the
payment of any tax, he may, for reasons to
be recorded in writing, seize the accounts,
registers or documents of such person
produced before him and shall grant a
receipt for the same, and shall retain the
same for so long as may be necessary in
connection with any proceedings under this
Act or the rules made thereunder for
prosecution.

(12) The Commissioner or an officer
authorised by him may cause purchase of
any goods or services or both by any
person authorised by him from the business
premises of any taxable person, to check
the issue of tax invoices or bills of supply
by such taxable person, and on return of
goods so purchased by such officer, such
taxable person or any person-in-charge of
the business premises shall refund the
1 All. M/S G.K. Trading Co., Ghaziabad Vs. Union of India & Ors.
711
amount so paid towards the goods after
cancelling any tax invoice or bill of supply
issued earlier.

Section 68. Inspection of goods in
movement.-(1)
The
Government
may
require
the
person-in-charge
of
a
conveyance carrying any consignment of
goods of value exceeding such amount as
may be specified to carry with him such
documents and such devices as may be
prescribed.

(2) The details of documents required
to be carried under sub-section (1) shall be
validated in such manner as may be
prescribed.

(3) Where any conveyance referred to
in sub-section (1) is intercepted by the
proper officer at any place, he may require
the
person-in-charge
of
the
said
conveyance to produce the documents
prescribed under the said sub-section and
devices for verification, and the said person
shall be liable to produce the documents
and devices and also allow the inspection
of goods.

Section 69. Power to arrest.-(1)
Where the Commissioner has reasons to
believe that a person has committed any
offence specified in clause (a) or clause (b)
or clause (c) or clause (d) of sub-section
(1) of section 132 which is punishable
under clause (i) or (ii) of sub-section (1), or
sub- section(2) of the said section, he may,
by order, authorise any officer of State tax
to arrest such person.

(2) Where a person is arrested under
sub-section (1) for an offence specified
under sub-section (5) of section 132, the
officer authorised to arrest the person shall
inform such person of the grounds of arrest
and produce him before a Magistrate
within twenty-four hours.

(3) Subject to the provisions of the
Code of Criminal Procedure, 1973 (2 of
1974), --

(a) where a person is arrested under
sub-section (1) for any offence specified
under sub-section (4) of section 132, he
shall be admitted to bail or in default of
bail, forwarded to the custody of the
Magistrate;

(b) in the case of a non-cognizable and
bailable offence, the Deputy Commissioner
or the Assistant Commissioner shall, for the
purpose of releasing an arrested person on
bail or otherwise, have the same powers
and be subject to the same provisions as an
officer-in-charge of a police station.

Section 70. Power to summon persons
to give evidence and produce documents.-
(1) The proper officer under this Act shall
have power to summon any person whose
attendance he considers necessary either to
give evidence or to produce a document or
any other thing in any inquiry in the same
manner, as provided in the case of a Civil
Court under the provisions of the Code of
Civil Procedure, 1908 (5 of 1908).

(2) Every such inquiry referred to in
sub-section (1) shall be deemed to be a
"judicial proceedings" within the meaning
of section 193 and section 228 of the Indian
Penal Code (45 of 1860).

Section
71.
Access
to
business
premises.- (1) Any officer under this Act,
authorised by the proper officer not below
the rank of Joint Commissioner, shall have
access to any place of business of a
registered person to inspect books of
account, documents, computers, computer
programs, computer software whether
installed in a computer or otherwise and
such other things as he may require and
which may be available at such place, for
the purposes of carrying out any audit,
scrutiny, verification and checks as may be
necessary to safeguard the interest of
revenue.

(2) Every person-in-charge of place
referred to in sub-section (1) shall, on
712 INDIAN LAW REPORTS ALLAHABAD SERIES
demand, make available to the officer
authorised under sub-section (1) or the
audit party deputed by the proper officer or
a cost accountant or chartered accountant
nominated under section 66--

(i) such records as prepared or maintained
by the registered person and declared to the
proper officer in such manner as may be
prescribed;

(ii) trial balance or its equivalent;

(iii) statements of annual financial accounts,
duly audited, wherever required;

(iv) cost audit report, if any, under section
148 of the Companies Act, 2013 (18 of 2013);

(v) the income-tax audit report, if any, under
section 44-AB of the Income-tax Act, 1961 (43 of
1961); and

(vi) any other relevant record, for the
scrutiny by the officer or audit party or the
chartered accountant or cost accountant within a
period not exceeding fifteen working days from
the day when such demand is made, or such
further period as may be allowed by the said
officer or the audit party or the chartered
accountant or cost accountant.

Sec 72. Officers to assist proper officers.-
(1) All officers of Police, Railways, Customs, and
those officers engaged in the collection of land
revenue, including village officers, officers of
Central tax and officers of Union territory tax
shall
assist
the
proper
officers
in
the
implementation of this Act.

(2) The Government may, by notification,
empower and require any other class of officers to
assist the proper officers in the implementation of
this Act when called upon to do so by the
Commissioner.

Section 6 of the C.G.S.T. Act:

Section 6 - Authorisation of officers of
State tax or Union territory tax as proper officer
in certain circumstances

(1) Without prejudice to the provisions of
this Act, the officers appointed under the State
Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act are
authorised to be the proper officers for the
purposes of this Act, subject to such conditions as
the Government shall, on the recommendations of
the Council, by notification, specify.

(2) Subject to the conditions specified in the
notification issued under sub-section (1),--

(a) where any proper officer issues an
order under this Act, he shall also issue an
order under the State Goods and Services
Tax Act or the Union Territory Goods and
Services Tax Act, as authorised by the State
Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act, as
the case may be, under intimation to the
jurisdictional officer of State tax or Union
territory tax;

(b) where a proper officer under the
State Goods and Services Tax Act or the
Union Territory Goods and Services Tax
Act has initiated any proceedings on a
subject matter, no proceedings shall be
initiated by the proper officer under this
Act on the same subject matter.

(3) Any proceedings for rectification,
appeal and revision, wherever applicable,
of any order passed by an officer appointed
under this Act shall not lie before an officer
appointed under the State Goods and
Services Tax Act or the Union Territory
Goods and Services Tax Act.

9. Crux of the submissions of the
learned counsel for the petitioner is that
once,
the
respondent
No.5
[Deputy
Commissioner (SIB), Ghaziabad], has
conducted a survey of the business
premises of the petitioner on 30.05.2018
and is investigating in the matter pursuant
to the aforesaid survey, no inquiry can be
initiated or summon can be issued by the
respondent No.4 under Section 70 of the
C.G.S.T. Act against the petitioner even if
basis of material of inquiry/ investigation
by the respondent Nos.4 and 5 may be
1 All. M/S G.K. Trading Co., Ghaziabad Vs. Union of India & Ors.
713
different. In other words, the respondent
No.5, i.e. State Authority may investigate/
inquire in all the matters pertaining to the
business of the petitioner and, therefore, the
summons in the matter of inquiry issued by
the respondent No.4 is barred by the
provisions of Section 6(2)(b) of the
C.G.S.T. Act.

Inquiry under Section 70

10. The words "subject-matter",
"proceedings" and "inquiry" have not been
defined either under the State G.S.T. Act
or the Union Territory G.S.T. Act or the
C.G.S.T. Act. Therefore, these words have
to be interpreted in the context of the
aforesaid Acts. The word "inquiry" in
Section 70 has a special connotation and a
specific purpose to summon any person
whose attendance may be considered
necessary by the proper officer either to
give evidence or to produce a document
or any other thing. It cannot be intermixed
with some statutory steps which may
precede or may ensue upon the making of
the inquiry or conclusion of inquiry. The
process of inquiry under Section 70 is
specific and unified by the very purpose for
which provisions of Chapter XIV of the
Act confers power upon the proper officer
to hold inquiry. The word "inquiry" in
Section 70 is not synonymous with the
word "proceedings", in Section 6(2)(b) of
the U.P.G.S.T. Act/ C.G.S.T. Act.

11. In Liberty Oil Mills and others vs.
Union of India and others, (1984) 3 SCC
465 (para-15), Hon'ble Supreme Court
considered the provisions of Import and
Export Control Act and Imports (Control)
Order, 1955 where the word "investigation"
was not defined and held that in the context it
means the process of collection of evidence
or the gathering of material.

12. Provisions of Section 70 has been
enacted for collecting evidence in matters
involving tax evasion which may also lead to
confiscation. After inquiry is completed and
materials for tax not paid or short paid or
erroneously refunded or input tax credit
wrongly availed or utilized, by reason of
fraud or wilful misstatement or suppression
of facts or otherwise are found, then it may
lead to demands and recovery under Section
73 or Section 74, as the case may be. When
action for assessment, demand and penalty
etc. including action under Section 73 or 74 is
taken, that shall amount to proceedings
referable to Section 6(2)(b) of the Act but the
inquiry under Section 70 is not a proceeding
referable to Section 6(2)(b) of the Act.

"Subject-Matter"
under
Section
6(2)(b):-

13. The words "subject-matter" used in
Section 6(2)(b) of the Act has not been
defined under the Act. In the case of Ballabh
Das vs. Dr. Madan Lal and others, (1970) 1
SCC 761 (para-5), Hon'ble Supreme Court
interpreted the words "subject-matter" in the
context of Civil Procedure Code where also
these words have not been defined. Hon'ble
Supreme Court held held that:

"The expression ''subject-matter' has
a reference to a right in the property which
the
plaintiff
seeks
to
enforce.
That
expression includes the cause of action
and the relief claimed. Unless the cause of
action and the relief claimed in the second
suit are the same as in the first suit it
cannot be said that the subject-matter of
the second suit is the same as that in the
previous suit. ............. ......... Mere identity
of some of the issues in the two suits did not
bring about an identity of the subjectmatter in the two suits. As observed in
Rakhma Bai v. Mahadeo Narayan, (I.L.R.
714 INDIAN LAW REPORTS ALLAHABAD SERIES
42 Bom.1155), the expression "subjectmatter" in Order XXIII, Rule 1, Code of
Civil Procedure means the series of acts or
transactions alleged to exist giving rise to
the relief claimed. In other words "subjectmatter" means the bundle of facts which
have to be proved in order to entitle the
plaintiff to the relief claimed by him. We
accept as correct the observations of Wallis
C.J. in Singa Reddi vs. Subba Reddi, (ILR
39 Mad. 987), that where the cause of
action and the relief claimed in the second
suit are not the same as the cause of
action and the relief claimed in the first
suit, the second suit cannot be considered
to have been brought in respect of the
same subject-matter as the first suit."

14. Thus, the phrase "subject-matter",
or the phrase "on the same subject-matter",
used in Section 6(2)(b) of the U.P.G.S.T.
Act/ C.G.S.T. Act with reference to any
proceedings, means same cause of action
for the same dispute involved in a
proceeding before proper officer under the
U.P.G.S.T. Act and the C.G.S.T. Act.

Effect of Section 6(2)(b) and Section
70 of the C.G.S.T. Act:-

15.

Section
6(2)(b)
prohibits
initiation of proceedings by the proper
officer under U.P.G.S.T. Act on the same
subject-matter where a proper officer
under the C.G.S.T. Act has initiated any
proceedings on the same subject-matter
subject to the conditions specified in the
notification issued under sub-Section (1).
Section 6(2)(b) of C.G.S.T. Act imposes
similar prohibition upon the proper officer
under the C.G.S.T. Act. Thus, Section
6(2)(b) of the C.G.S.T. Act/ U.P.G.S.T. Act
prohibits initiation of any proceedings on
the same subject-matter by a proper officer
under the C.G.S.T. Act/ by a proper officer
under the State G.S.T. Act, as the case may
be, on the same subject-matter.

16. Section 70 of the U.P.G.S.T. Act
or C.G.S.T. Act is part of Chapter XIV
which contains provisions for inspection,
search, seizure and arrest. Section 70 of
both the Acts are pari materia which
empowers the proper officer under the Act
to summon any person whose attendance
he considers necessary either to give
evidence or to produce a document or
any other thing in any inquiry.

17. Thus, Section 6(2)(b) of the
C.G.S.T. Act prohibits separate initiation of
proceedings on the same subject-matter
by the proper officer under the C.G.S.T.
Act when proceeding on the same subjectmatter by the proper officer under the State
Act has been initiated, whereas Section 70
of the U.P.G.S.T./ C.G.S.T. Act merely
empowers the proper officer to summon
any person in any inquiry. The word
"proceedings" used in Section 6(2)(b) is
qualified by the words "subject-matter"
which indicates an adjudication process/
proceedings on the same cause of action
and for the same dispute which may be
proceedings relating to assessment, audit,
demands and recovery, and offences and
penalties
etc.
These
proceedings
are
subsequent to inquiry under Section 70 of
the Act. The words "in any inquiry" used in
Section 70 of the Act is referable to the
provisions of Chapter XIV, i.e. Section 67
(power of inspection, search and seizure),
Section 68 (inspection of goods in
movement), Section 69 (power to arrest),
Section 71 (access to business premises)
and Section 72 (officers to assist proper
officers). Therefore, proper officer under
the U.P.G.S.T. Act or the C.G.S.T. Act
may invoke power under Section 70 in any
inquiry. Prohibition of Section 6(2)(b) of
1 All. M/S Ramky Infra. Ltd., Hyderabad Vs. State of U.P. & Ors.
715
the C.G.S.T. Act shall come into play only
when any proceeding on the same subjectmatter has already been initiated by a
proper officer under the U.P.G.S.T. Act.

18.

Thus,
the
words
"any
proceeding" on the same "subject-matter"
used in Section 6(2)(b) of the Act, which is
subject to conditions specified in the
notification issued under sub-Section (1);
means any proceeding on the same cause of
action and for the same dispute involving
some adjudication proceedings which may
include
assessment
proceedings,
proceedings for penalties etc., proceedings
for demands and recovery under Sections
73 and 74 etc.

Conclusions:-

19. In view of the above, we have
reached to the following conclusions :-

(i) The word "inquiry" in Section 70
has a special connotation and a specific
purpose to summon any person whose
attendance may be considered necessary by
the proper officer either to give evidence
or to produce a document or any other
thing. It cannot be intermixed with some
statutory steps which may precede or may
ensue upon the making of the inquiry or
conclusion of inquiry. The process of
inquiry under Section 70 is specific and
unified by the very purpose for which
provisions of Chapter XIV of the Act
confers power upon the proper officer to
hold inquiry. The word "inquiry" in Section
70 is not synonymous with the word
"proceedings", in Section 6(2)(b) of the
U.P.G.S.T. Act/ C.G.S.T. Act.

(ii) The words "any proceeding" on
the same "subject-matter" used in Section
6(2)(b) of the Act, which is subject to
conditions specified in the notification
issued under sub-Section (1); means any
proceeding on the same cause of action and
for the same dispute involving some
adjudication
proceedings
which
may
include
assessment
proceedings,
proceedings for penalties etc., proceedings
for demands and recovery under Section 73
and 74 etc.

(iii) Section 6(2)(b) of the C.G.S.T.
Act prohibits a proper officer under the Act
to initiate any proceeding on a subjectmatter where on the same subject-matter
proceeding by a proper officer under the
U.P.G.S.T. Act has been initiated.

(iv) Facts briefly noted in paras-6 and
7 above, would disclose that there is no
proceeding by a proper officer against the
petitioner on the same subject-matter
referable
to
Section
6(2)(b)
of
the
U.P.G.S.T. Act. It is merely an inquiry by a
proper officer under Section 70 of the
C.G.S.T. Act.

20. For all the reasons afore-stated,
we do not find any merit in the present
writ petition. Consequently, the writ
petition fails and is hereby dismissed.
----------

(2021)01ILR A715
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 15.12.2020

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ Tax No. 671 of 2020

M/S Ramky Infra. Ltd., Hyderabad
 ...Petitioner
Versus
State of U.P. & Ors. ...Respondents