The Calcutta High Court has directed coordination between investigating GST authorities and the Directorate General of GST Intelligence (DGGI) while disposing of a challenge to proceedings allegedly initiated by four authorities for overlapping tax periods concerning the same suppliers.
The bench of Justice Smita Das De directed the taxpayers to submit comprehensive replies to the show cause notices, along with relevant documents and earlier adjudication orders. The Court permitted the ongoing investigations to continue and required the investigating authorities to share their findings with the DGGI for effective adjudication. It disposed of the petition without deciding the merits of the challenge.
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The petitioners’ principal grievance was that four independent authorities had initiated proceedings for the same periods concerning the cancellation of the same suppliers. They contended that these overlapping proceedings were arbitrary, illegal and without jurisdiction.
Their counsel relied on paragraph 97 of the Supreme Court’s judgment in Armour Security India Ltd. v. Commissioner, CGST, Delhi East Commissionerate, reported in (2025) 177 Taxmann.com 478 (Supreme Court), to support their objection to the parallel proceedings.
The High Court took note of the cited judgment and the documents placed on record, but did not give a final ruling on whether the proceedings violated the principles relied upon by the petitioners.
The petitioners submitted that notices had already been issued for 2020–21 and 2021–22, to which they had filed replies before the authority concerned.
According to their submissions, those proceedings resulted in orders-in-original under Section 74 of the West Bengal Goods and Services Tax Act, 2017, dated July 27, 2026, for 2020–21 and July 28, 2026, for 2021–22.
They further stated that the DGGI authorities had issued show cause notices covering the tax periods from 2020–21 to 2025–26. An adjournment application had been filed requesting that those proceedings be kept in abeyance pending disposal of the writ petition.
Through an interlocutory application, the petitioners sought protection against coercive recovery of the demands confirmed in the July orders. They also sought to restrain adjudication of a show cause notice dated July 19, 2026, and requested that further notices not be issued by the other investigating authorities until the proceedings attained finality.
The DGGI raised a preliminary objection to the maintainability of the interlocutory application, arguing that the relief sought could not be entertained without amending the prayers in the writ petition.
The DGGI also submitted that a copy of the application had not been served on the authorities concerned, preventing them from making appropriate submissions on the issues raised.
Other respondent authorities argued that the petitioners were required to appear when summoned for investigation under Section 70 of the Central Goods and Services Tax Act, 2017, but were not cooperating or attending on the dates fixed.
Those authorities further submitted that investigations had commenced, while adjudication proceedings had not yet started, and that the audit proceedings were based on the taxpayers’ returns.
The Court directed the petitioners to file separate, comprehensive and detailed replies to the consolidated show cause notices covering 2020–21 to 2025–26.
The replies must include all relevant documents, particularly the orders-in-original already passed by the authority identified as respondent No. 7.
The Court granted four weeks from communication of its order to submit the replies before the Additional Commissioner or Joint Commissioner of Central Tax, North Commissionerate, Kolkata, GST Bhawan.
The adjudicating authority was directed to consider the replies and pass a reasoned and speaking order within six weeks of receiving them. Before deciding the matter, it must provide an opportunity of personal hearing to every petitioner who had received a notice.
The decision must be communicated within a further week.
The Court expressly permitted the ongoing investigations by the authorities described in the order as “Anti Aviation” and the Audit Commissionerate to continue.
However, those authorities were directed to share the details of their investigations with the DGGI to facilitate effective adjudication of the issues relating to the tax periods in dispute.
The petitioners were directed to cooperate with the investigating agencies and the DGGI during the hearing process, and to avoid unnecessary adjournments.
The Court additionally directed M/s. Ishan Information Services Private Ltd. to submit a comprehensive reply before the Joint Commissionerate for the tax periods 2020–21 and 2021–22.
The High Court disposed of the writ petition with these procedural directions, leaving the substantive issues open for determination by the authorities.
It clarified that the authorities must decide independently, without being influenced by the observations in the order. Since no affidavits had been filed, the allegations in the petition were treated as denied and not admitted.
Although protection against coercive recovery had been sought, the operative directions do not expressly grant a recovery stay or quash the earlier demand orders. The order instead provides a framework for detailed replies, personal hearings and sharing of investigation findings, while leaving the legality of the disputed demands and proceedings undecided.
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