Facts of the case

The petitioner Firm has been operating in the real estate sector for several years by creating several residential projects in and around Chennai and constructing building/commercial sites in India.

They employ roughly 200 people, and its administrative office is located at 153 Wallace Garden, 2nd Street, Nungambakkam, Chennai, 600 006 (see address below).

The building where the petitioner’s business is located has two doors that face Nungambakkam High Road. One Ramu (the fourth respondent in this case) built a bunk shop next to one of the gates that are obstructing access to the petitioner-Company.

Without the consent of respondents 1 and 2, he built the bunk store and started selling all illegal goods, including pan masala, gutka, and cigarettes.

Owing to this use of illegal drugs, several roadside stalkers are using them and congregating in a group on the petitioner campus, Company’s which is annoying to the petitioner-workers Company’s and legitimate customers who often visit the petitioner’s office.

The SCN dated October 21, 2022 (“the Impugned SCN”) issued by the State Tax Authority has been contested by M/s. VGN Projects Estates Private Limited (“the Petitioner”) on the grounds that it was issued in contravention of Section 6(2)(b) of the Tamil Nadu Goods and Services Act, 2017. (“the TNGST Act”).

The petitioner argued that the Central Tax Authority had issued a similar SCN to him or her on July 29, 2022, in violation of the Central Goods and Services Tax Act of 2017 (the “CGST Act”), and that since the proper officer under the CGST Act had already started legal action against the petitioner, no further legal action could be taken by the proper officer under the provisions of Section 6(2)(b) of the TNGST Act.

This writ petition has been filed out of aggravation.

The Revenue Department (“the Respondent”) argued, however, that if the Petitioner provides a response to the impugned SCN, those identical flaws for which the Central Tax Authority has issued an SCN would be left out and action will only be taken on the remaining flaws.

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The issue before the court

Whether fresh proceedings can be initiated against the Petitioner under the TNGST Act with regard to the very same subject matter on which the SCN has been issued by the Central Tax Authority?

Relevant provision

Section 6(2)(b) of the CGST Act: – “Where a proper officer under the Central 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.”

Comments on the judgment

In W.P. No. 2391 of 2023 and W.M.P. No. 2481 of 2023, the Hon. Madras High Court upheld the following:

The only limited relief that can be granted to the Petitioner is the ability to submit a thorough reply to the contested SCN to the Respondents, stating all objections raised, including the objection with regard to Section 6(2)(b) of the TNGST Act, so that the Respondent may consider the Petitioner’s grievance.

instructed the petitioner to respond to the contested SCN within three weeks. the Respondent shall issue final orders on the merits and in conformity with the law upon receipt of such reply.

The assessee was given a deadline of January 30, 2023, by the Hon. Madras High Court to answer to the Show Cause Notice (“SCN”) issued by the State Tax Authority in the matter of M/s. VGN Projects Estates Private Limited v. Assistant Commissioner (State Taxes) and others. The State Revenue Authority had begun concurrent actions on a relevant case that is now in litigation. It was agreed that as the Central Tax Authority is already looking into the issues, if the SCNs have the same issues, they should be omitted and no further action should be taken against the assessee for the shortcomings.

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