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M/S Prime Steel Industries Pvt. Ltd. v. the State of Hp and Another

GST – Parallel proceedings

Himachal Pradesh HC1 May 2025CWP/616/2025

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Case brief

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What is this about?

CWP No.616 of 2025, M/s Prime Steel Industries Pvt. Ltd. v. State of H.P. (Himachal Pradesh High Court, 01.05.2025): Section 70 CGST summons by DGGI Meerut; plea of parallel proceedings barred by Section 6(2)(b) CGST Act; blocking and unblocking of electronic credit ledger / Input Tax Credit; transfer of GST investigation from DGGI to State tax authority; writ disposed of as having achieved its purpose; jurisdictional issue left undecided.

What did the court decide?

No substantive relief adjudicated; writ petition disposed of as having achieved its purpose upon transfer of the DGGI proceedings from respondent No.2 to respondent No.1, with the credit ledger reported unblocked; pending applications, if any, also disposed of. ¶26

M/S Prime Steel Industries Pvt. Ltd. Vs the… — GST and Indirect Tax | Himachal Pradesh HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the summons dated 13.12.2024 issued by respondent No.2 under Section 70 CGST Act and the consequential blocking of the petitioner's credit ledger on 01.01.2025 and 06.01.2025 are without jurisdiction, being parallel proceedings by respondent No.1 and respondent No.2 contrary to Section 6(2)(b) of the CGST Act.

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Court's answer

Since the proceedings initiated by respondent No.2 have been transferred to respondent No.1 and now stand pending before respondent No.1, the writ petition has achieved its purpose and is disposed of accordingly; the Court did not decide the Section 6(2)(b) jurisdiction question.

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Key takeaways

On the blocked credit ledger, the Court recorded the instruction of learned counsel for respondent No.2 that the credit ledger stands unblocked, as specifically averred in para 3 of respondent No.2's reply (communication dated 23.12.2024 from the petitioner was considered, investigation transferred to respondent No.1, and Input Tax Credit unblocked).obiter¶27

Detailed headnote1 paragraphs

GST - Parallel proceedings - Petitioner challenged summons dated 13.12.2024 issued under Section 70 of the CGST Act, 2017 by respondent No.2 (Senior Intelligence Officer, DGGI, Meerut Zonal Unit) and consequential blocking of its Input Tax Credit ledger on 01.01.2025 and 06.01.2025, contending the action was without jurisdiction and contrary to Section 6(2)(b) of the CGST Act, since respondent No.1 (State tax authority) had already initiated proceedings by notice dated 03.08.2021. During pendency, respondent No.2 transferred the proceedings to respondent No.1 vide letter No.DGGI/INV/GST/2295/2021/Pt IV/4910 dated 28.02.2025, and counsel for respondent No.2 stated on instructions that the credit ledger stands unblocked. HELD: the petition has achieved its purpose and is disposed of; the question of jurisdiction under Section 6(2)(b) was not adjudicated. (Coram: Tarlok Singh Chauhan and Sushil Kukreja, JJ.)

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( 2025:HHC:12143-DB )

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA.

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CWP No.616 of 2025 Decided on: 1^st May, 2025

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M/s Prime Steel Industries Pvt. Ltd. .......Petitioner

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versus

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State of H.P and another ...Respondents

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Coram

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The Hon’ble Mr. Justice Tarlok Singh Chauhan, Judge. The Hon’ble Mr. Justice Sushil Kukreja, Judge. Whether approved for reporting?¹ No.

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For the petitioner:	Mr. Shrawan Dogra, Senior Advocate with Mr.Manik Sethi, Advocate.
For the respondents:	Mr.Navlesh Verma, Addl. A.G and Ms.Sharmila Patial, Addl. A.G. for respondent No.1.
	Mr. Vijay K. Arora, Senior Advocate with Ms.Aastha Kohli, Advocate for respondent No.2.

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Tarlok Singh Chauhan, Judge (Oral)

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The petitioner being aggrieved by the initiation of parallel proceedings by respondent No.1 as well as respondent No.2 by virtue of notice issued under Section 70 of the Central Goods and Services Tax Act, 2017, has approached this Court by filing the instant petition for grant of the following substantive relief:-

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1 Whether the reporters of Local Papers may be allowed to see the judgment? Yes.

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( 2025:HHC:12143-DB )

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“A) A writ in the nature of mandamus or any other appropriate writ to quash and set aside the summons dated 13.12.2024 (Annexure P-8), issued by the Respondent no. 2 and consequential action of blocking the credit ledger of the petitioner on 01.01.2025 on the GST Portal on dated 01.01.2025 (Annexure P-10) & 06.01.2025 (Annexure P-14) as the same are without jurisdiction and in the teeth of Section 6(2)(b) of the Central Goods and Service Tax Act 2017.”

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On 17.03.2025, the Court passed the following

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order:-

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“Even though the State has filed instructions dated 15.3.2025, however we are of the considered view that the stand of the respondent-State must be reflected on affidavit. Therefore, necessary affidavit be filed within two weeks.

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List on 10.4.2025. In the meanwhile, reply on behalf of respondent No.2 be also filed.”

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In compliance to the aforesaid orders, respondent No.1 has filed affidavit, wherein it is averred that the summon/notice had been issued to the petitioner on 03.08.2021 by the Assistant Commissioner State Taxes and Excise-cum-proper Officer, to which, the petitioner had submitted its reply on 17.08.2021. It is further averred that in the instant case, respondent No.2 had initiated the proceedings against the petitioner much later than the proceedings initiated by respondent No.1. Accordingly, respondent No.1 has

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( 2025:HHC:12143-DB )

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submitted that petitioner be directed to let respondent No.1 conclude the proceedings under the CGST/HPGST Rules, 2017.

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The record reveals that respondent No.2 i.e. Senior Intelligence Officer, DGGI, Meerut Zonal Unit has now transferred the proceedings and the same are pending before the 1^st respondent, as is evident from letter dated 24.04.2025, which reads thus:-

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“ In continuation to this office letter No. 6533 dated, 15^th March, 2025 on the above. In this context, it is submitted that the instant case has already been transferred to this office by the Respondent No. 2 i.e. Senior Intelligence Officer, DGGI Meerut Zonal Unit, Ground Floor, Opp. Saheed Park, Delhi Road, Meerut vide letter No.DGGI/INV/GST/2295/2021/Pt IV/4910 dated 28.02.2025 (copy enclosed).”

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Since the proceedings now stand transferred by respondent No.2 to respondent No.1, the instant petition has achieved its purpose and is disposed of accordingly.

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As regards the ‘ blocked credit ledger’ , learned counsel for respondent No.2, on instructions, submits that the same stands unblocked and such averments has specifically been made in para 3 of the reply. The relevant portion thereof reads as under:-

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“Further, communication dated 23.12.2024 received from the petitioner, was considered and its investigation has already been transferred to respondent No.1 and unblocked the Input Tax Credit.”

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( 2025:HHC:12143-DB )

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