M/S Sun Automation Limited Vs Sales Tax Officer Class Ii/Avato & Ors.

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* IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 5734/2025 & CM APPL. 26164/2025

.....Petitioner

M/S SUN AUTOMATION LIMITED .....Petitioner Through: Mr. Devendra Jain, Mr. Rajat Mittal, Ms. Priyanka & Mr. S. Negoi, Advocates.

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versus

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SALES TAX OFFICER CLASS II/AVATO & ORS. .....Respondents Through: Mr. Anurag Ojha, Sr. SC with Mr. Subham Kumar & Mr. Dipak Raj, Advocates. Ms. Neha Malik, Sr. SC (CGST)

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CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA

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O R D E R % 01.05.2025

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This hearing has been done through hybrid mode. CM APPL. 26165/2025 & CM APPL. 26166/2025 (for exemption)

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Allowed, subject to all just exceptions. Applications are disposed of. W.P.(C) 5734/2025 & CM APPL. 26164/2025

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The present petition has been filed by the Petitioner –M/s Sun Automation Limited under Articles 226 & 227 of the Constitution of India challenging the show cause notice dated 27th November, 2024 (hereinafter, ‘the SCN’) as also the consequent order dated 27^th February, 2025 (hereinafter, ‘the impugned order’) passed by the office of Sales Tax Officer Class II/AVATO Jurisdiction: Ward 71:Zone 6: Delhi, State/UT: Delhi (hereinafter, ‘the DGST Department’) pertaining to the tax period April 2020

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Page 1 of 6

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W.P.(C) 5734/2025

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:11:48

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to March 2021.

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Vide the impugned order, a demand of Rs.157,66,85,186/- has been raised, both, of tax and penalty in respect of certain transactions entered into between the Petitioner and two companies namely M/s Microlyte Energy Pvt. Ltd and M/s. Jetibai Grandsons Services India (P.) Ltd.

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The submission of the ld. Counsel for the Petitioner is that the demand raised in the impugned order is not sustainable in view of Section 6(2)(b) of the Central Goods and Service Tax Act, 2017 (hereinafter, ‘the CGST Act’), as the Central Goods and Service Tax Department (hereinafter, ‘the CGST Department’) has already adjudicated the matter on the same issue and thus, the DGST Department does not have the power to adjudicate upon the same. The overlapping has been explained by the Petitioner in the synopsis to the present petition by way of table. The said table is extracted herein below:

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Page 2 of 6

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W.P.(C) 5734/2025

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:11:48

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This is a digitally signed order.

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Page 3 of 6

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W.P.(C) 5734/2025

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:11:48

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The submission on behalf of the Petitioner is that neither the SCN nor the impugned order issued upon the Petitioner by the DGST Department is tenable.

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Learned counsel for the Petitioner also submits that in so far as the demand by the CGST Department is concerned, the same was challenged before the Commissioner (Appeals-I), CGST and the appeal in respect of the said proceedings has also been decided vide Order-in-Appeal No.: 17-18/ Commr./Central Tax/ Appeal-I/ Delhi/ 2025 dated 3^rd April, 2025, wherein a penalty has been imposed on the Petitioner.

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In view of the above, it is clear that the DGST Department shall be required to look at the order passed by the appellate authority dated 3rd April, 2025. The relevant provision being relied upon the Petitioner i.e., Section 6(2)(b) of the CGST Act is reproduced herein below:

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Page 4 of 6

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W.P.(C) 5734/2025

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:11:48

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6. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances Xxxx

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(2) Subject to the conditions specified in the notification issued under sub-section (1),––

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xxxxx

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(b) where a proper officer under the State Goods and Services Tax Act or the Union Territory 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.

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Further, this Court in W.P. (C) 8625/2022 titled Amit Gupta v. Union of India & Ors. , while discussing the above-stated provision at length, has held as under:

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28. To ensure that there are no multiple proceedings in regard of the central and the state officers being authorized as proper officers, Clause (b) of Section 6(2) of the Act provides that where a proper officer under the SGST Act and the UGST Act has initiated proceedings on a subject matter, the proper officer under the Act would not initiate proceedings “on the same subject matter”. This provision of CGST is also mirrored by Clause (b) of Section 6(2) of the SGST Act and UGST Act as well. Thus, where a proper officer under the CGST Act had initiated proceedings on a subject matter, no proceedings would be initiated by proper officer authorized under the SGST Act or UGST Act on the same subject matter .

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29. It is clear that the object of Section 6(2)(b) of the Act is to ensure that cross empowerment of officers of central tax and state tax do not result in the taxpayers being subjected to parallel proceedings.

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30. We are unable to accept that the provisions of Section 6(2)(b) of the Act proscribe the transfer of investigations or proceedings as is contended on behalf of the petitioner. The object of Section 6(2)(b) of the Act is to avoid multiple proceedings by State Tax Officers and Central Tax Officers

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Page 5 of 6

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W.P.(C) 5734/2025

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:11:48

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on the same subject matter and the rule of purposive interpretation requires Section 6(2)(b) of the Act to be read in the light of the aforesaid object.

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10 In light of the rationale of Section 6(2)(b) of the CGST Act, as explained in the decision herein above, it is clear that the DGST Department shall be required to consider the order dated 3rd April, 2025 passed by the appellate authority and shall accordingly reconsider as to whether the SCN dated 27th November, 2024 as also the consequent impugned order dated 27th February, 2025 will sustain in view of Section 6(2)(b) of the CGST Act.

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The impugned order is accordingly set aside. Let the order of the Commissioner (Appeals-I), CGST dated 3^rd April, 2025 be placed before the DGST Department so that the matter can be considered afresh. A personal hearing shall be afforded to the Petitioner, before taking any decision. 12. The petition is disposed of in said terms. Pending applications, if any, are also disposed of.

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PRATHIBA M. SINGH, J.

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RAJNEESH KUMAR GUPTA, J.

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MAY 1, 2025/ da/ss

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Page 6 of 6

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W.P.(C) 5734/2025

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:11:48

M/S Sun Automation Limited v. Sales Tax Officer Class Ii/Avato & Ors.

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M/S Sun Automation Limited v. Sales Tax Officer Class Ii/Avato & Ors.

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