GST Officer Erred by Issuing Order Despite HC Stay: Bombay HC
The Bombay High Court recently quashed a GST order that was issued despite the matter being under probe by the DGGI and stayed by the Karnataka High Court. This case is a strong reminder of how overlapping investigations and disregard of judicial restraint can invalidate GST proceedings.
What Was the Case?
Case Title: Unicorp Infra Projects LLP vs Union of India
Court: Bombay High Court
Order Date: July 2025
Key Issue: Whether a GST officer can issue an order when the matter is already under DGGI investigation and stayed by another High Court.
Why the Order Was Quashed
The Bombay HC quashed the impugned assessment order for the following reasons:
- Parallel Jurisdiction Conflict: The Directorate General of GST Intelligence (DGGI) was already investigating the same issue.
- Violation of Stay: The Karnataka High Court had explicitly stayed all proceedings arising from the DGGI’s summons.
- No Independent Cause of Action: The jurisdictional officer acted without fresh grounds, relying solely on material already seized by DGGI.
- Judicial Discipline Ignored: Proceeding with an order while a matter is sub judice elsewhere amounts to judicial overreach.
Legal Basis and References
- Article 226 of the Constitution: Empowered the High Court to quash administrative actions that are arbitrary or violate court orders.
- Section 6(2)(b) of CGST Act, 2017: If the DGGI initiates proceedings, no other officer should proceed for the same cause of action.
- Karnataka HC Stay: The stay was binding, and the jurisdictional officer had a duty to respect it.
Case Law Quoted:
Union of India vs Pavan Hans Ltd. – Courts have emphasized cooperative federalism and administrative discipline in tax matters.
Key Takeaways for Taxpayers
- DGGI-led cases can’t be duplicated by jurisdictional officers unless a distinct cause exists.
- Always check if there’s an existing stay or legal remedy in another court before responding to multiple notices.
- High Courts have the power to quash overlapping or procedurally flawed GST orders.
Expert View: What Should Businesses Do?
“If your business is already under DGGI investigation or has obtained a stay, inform other GST authorities with documentary proof immediately. Multiple proceedings can be challenged as illegal.”
— Efiletax Legal Team
What This Means for GST Administration
- GSTN coordination remains weak across agencies like DGGI, SGST, and CGST.
- Taxpayers often suffer due to lack of information-sharing and overlapping actions.
- This ruling reinforces the importance of judicial discipline and rule-based enforcement under GST.
Related Compliance Tip
If you receive GST notices from multiple authorities:
- Check the origin of investigation (DGGI, State, etc.)
- Look for any existing stay orders or proceedings
- Consider filing a Writ Petition if duplication continues
Internal Link
Read also: Can You Get GST Penalty Waiver After DRC-07? Legal Options Explained
External Link
Refer official CGST law: https://cbic-gst.gov.in
Summary
The Bombay High Court quashed a GST officer’s order that overlapped with an ongoing DGGI probe already stayed by the Karnataka HC, citing violation of judicial discipline and lack of independent cause of action.
FAQs
Q1. Can two GST authorities investigate the same issue?
Not unless there are different causes of action. If DGGI starts investigation, other officers must back off under Section 6(2)(b) of CGST Act.
Q2. What if I get notices from multiple GST offices?
Check for any ongoing case or stay order. You can challenge the second notice as legally invalid.
Q3. What’s the remedy against illegal GST orders?
You can approach the High Court under Article 226 for quashing such orders.