State GST Authority Cannot Prosecute If Central Authority Has Already Initiated Action On Same Subject Matter- Madras HC

A Madras High Court Bench of Justice Adbul Quddhose has clarified that the State Authority cannot prosecute the petitioner once again if the Central Authority has already initiated action against the petitioner in respect of the same subject matter. 

Counsel Adithya Reddy appeared for the Appellant, while Counsel Sai Srujan Tayi and Government Advocate Vasantha Mala appeared for the Respondents.

In this case, the petitioner challenged a summons issued by the respondent on the ground that the Central and State Authorities do not have powers to initiate simultaneous proceedings on the same subject matter against the petitioner, as per the respective GST Acts. 

The Court noted that no final decision had been taken by the respondent authority to initiate action against the petitioner under the TNGST Act, 2017 and that the petitioner had only been called to produce documents and participate in a personal hearing. It was noted by the Court that the petitioner had not participated in the personal hearing and chose to file the petition instead. 

In light of the same, the Court observed that "to substantiate his defence that he cannot be once again prosecuted by the State Authority under the TNGST Act, 2017, he has to participate in the enquiry to be conducted by the fifth respondent and only then it can be ascertained whether the proceedings initiated by the Central and State Authority are one and the same involving the same subject matter."

Issuing a clarification, the Court held that "If it is the same subject matter, the State Authority cannot prosecute the petitioner once again as the Central Authority has already initiated action against the petitioner in respect of the very same subject matter."

The Court also deemed it fit to grant one more opportunity to the petitioner to participate in the personal hearing.

Subsequently, the petition was disposed of and the petitioner was directed to appear before the respondent without fail.

Cause Title: Tvl Metal Trade Incorporation v. The Special Secretary

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