In W.P. (C) 8842/2023 -DEL HC- Delhi High Court dismisses M/s Metal Edge’s petition challenging CGST Show Cause Notice, finds petitioner’s contention unpersuasive
Justice Vibhu Bakhru & Justice Amit Mahajan [05-07-2023]

Read Order: M/s Metal Edge through its Prop. Ayushie Bansal V. Sales Tax Officer Class II & Anr

Chahat Varma

New Delhi, July 31, 2023: The Delhi High Court has dismissed the petition filed by M/s Metal Edge (petitioner), stating that their contention regarding the impugned show cause notice under Section 73 of the Central Goods and Services Tax Act (CGST Act) lacking jurisdiction due to a parallel investigation by Central Goods and Service Tax Authorities in Chandigarh, was found to be unpersuasive.

In the said case, the petitioner had filed the present petition to challenge an order that cancelled their GST registration. The petitioner argued that the order was issued by a Sales Tax officer who was not a 'proper officer' and therefore lacked the jurisdiction to pass such an order. Additionally, the petitioner contended that the show cause notice under Section 73 of the CGST Act was without jurisdiction, as the Central Goods and Service Tax Authorities in Chandigarh had already initiated an investigation into their affairs. According to the petitioner, during the course of the investigation conducted by authorities in Chandigarh, the entire record of their business was seized, and they were also called for recording their statement. As a result, the petitioner claimed that, in accordance with Section 6 of the CGST Act, it is impermissible for the Sales Tax officer to commence parallel proceedings.

The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan noted that the records of the petitioner were called in connection with the investigation into the affairs of another individual named Mr. Rajneesh Bansal and not against the petitioner. Therefore, there was no parallel investigation against the petitioner. The bench further emphasized that the petitioner was not barred from raising the contention that the proceedings related to the show cause notice were not maintainable, and they had the right to present this objection before the concerned officer.

Regarding the cancellation of the GST registration, the counsel representing the petitioner did not pursue the issue before the court.

Based on the observations and contentions presented in the case, the bench concluded that there were no valid grounds to entertain the present petition.