The Orissa High Court has quashed the parallel proceedings in respect of availment of fake Input Tax Credit (ITC) by DGGI Rourkela, citing violation of Section 6(2)(b) of CGST Act.
The bench of Justice Harish Tandon and Justice Murahari Sri Raman has observed that the initiation of proceedings on the same subject- matter under Section 74 of the GST Act by the Deputy
Director, DGGI, Rourkela Regional Unit in pursuance of which the Assistant Commissioner, GST and Central Excise, Rourkela-I Division, Rourkela proceeded to pass Order-in-Original, Show Cause Notice, being at a later point of time than the Show Cause Notices issued by the Additional State Tax Officer, Rourkela-II Circle, Sundargarh, the initiation of proceeding by the Central Proper Officer cannot be sustained in view of provisions contained in Section 6(2)(b) of the GST Act and is liable to be quashed.
The petitioner/assessee, Tansam Engineering and Construction Company questioning propriety, legality and tenability of Order passed by the Assistant Commissioner, Rourkela-I Division having jurisdiction of Rourkela-II Circle, Sundargarh exercising power under Section 74 of the Central Goods and Services Tax Act, 2017/the Odisha Goods and Services Tax Act, 2017 raising demands vide Summary of Order in Form GST DRC-07 pertaining to tax period from December, 2017 to March, 2018 and Summary of Order dated 31.01.2025 relating to tax period August, 2018.
Invoking provisions of Section 74 of the GST Act, the Deputy Director, Directorate General of Goods and Services Tax Intelligence, Rourkela Regional Unit issued a Show Cause Notice relating to tax period which contained self-same allegations, which had already been dealt with by the State Proper Officer.
Notwithstanding reply in Form GST DRC-06 was submitted on 30.07.2022 apprising the factual scenario along with relevant evidence before the DGGI, the Assistant Commissioner, Rourkela-I Division proceeded with the matter.
The petitioner reiterated its stand that based on Tax Evasion Report containing same sort of allegation of availing input tax credit on the strength of fake invoices issued by certain named suppliers relating to transactions effected during the tax periods from July, 2017 to March, 2018 and April, 2018 to March, 2019, the State Proper Officer had already completed proceedings under Section 74 of the GST Act, against which the appeals have also come to be concluded.
Rudra Prasad Kar, Senior Advocate on behalf of the petitioner argued that based on intelligence received by communications containing allegations of fake transactions and consequential wrongful availment of input tax credit, the State Proper Officer initiated proceeding under Section 74 of the GST Act on 02.07.2021 by issue of Show Cause Notice in Form GST DRC-01A for the tax period December, 2017 (Financial Year 2017-18) and later another two Show Cause Notices dated 30.07.2021 in Form GST DRC-01A for the tax periods March, 2018 (Financial Year 2017-18 and August, 2018 (Financial Year 2018-19). On 13.08.2021 Show Cause Notice has been issued by the Deputy Director, DGGI, Rourkela Regional Unit under Section 74 for the self-same tax periods relating to said Financial Years based on same allegations of wrongful claim of input tax credit by dint of fake invoices issued by named non-existent suppliers.
Rudra Prasad Kar, Senior Advocate urged that same subject-matter could not be seized of by two authorities and independent demands on the very same allegations qua self-same transactions alleged to have been effected with the non-existent suppliers should have been raised. Both the demands under Section 74 of the GST Act by two different authorities— one by the State Proper Officer and the other by the Central Proper Officer— would tantamount to double taxation.
The court quashed, the Order-in-Original dated 30.01.2025 passed by the Assistant Commissioner, GST and Central Excise, Rourkela-I Division cannot be protected and the same is also set aside.
Case Details
Case Title: M/s. Tansam Engineering and Construction Company Versus The Commissioner, CGST and Central Excise Rourkela Commissionerate, Rourkela
Case No.: W.P.(C) No.15935 of 2025
Date: 14.10.2025
Counsel For Petitioner: Rudra Prasad Kar, Senior Advocate
Counsel For Respondent: Sunil Mishra, Standing Counsel
