The Hon’ble Bombay High Court in HM Leisure vs Assistant Commissioner of CGST of CGST, Div. – 1 & 2 Ors. [Writ Petition No. 236 of 2025 dated July 28, 2025] held that issuing multiple show cause notices by different authorities on the same subject matter and period creates chaos, harassment, and conflicting decisions, and quashed the order-in-original passed by the Deputy Commissioner, CGST, Goa, as it duplicated proceedings already initiated by the DGGI, Mumbai on an all-India basis.
Facts:
HM Leisure (“the Petitioner”), a partnership firm providing sporting facilities (bowling) and video game services, with its head office in Bangalore and a branch in Goa, registered under the GST Act.
Assistant Commissioner of CGST, Div. – 1 & 2, Goa, and others (“the Respondent”) issued a show cause notice (“the SCN”) dated April 18, 2022, proposing a tax demand of Rs.67,50,522/- on video gaming and bowling services at 18%, along with interest and penalty. The Respondent passed an order-in-original dated January 30, 2025, confirming the demand.
The Petitioner contended that video game services are taxable at 18%, bowling services are exempt, and shoe usage charges are taxable at 5%, as per CBIC Circular dated October 6, 2021. They argued that the DGGI, Mumbai, had initiated an all-India investigation, including the Goa branch, via an SCN dated August 3, 2024, which was stayed by the Karnataka High Court, and requested that the Goa proceedings be transferred to DGGI or kept in abeyance.
The Respondent contended that the order dated January 30, 2025, was well-reasoned, complied with natural justice, and addressed additional issues (excess Input Tax Credit and differential tax liability on amusement facilities) not covered in the DGGI’s SCN, thus justifying their adjudication.
The Petitioner approached the Bombay High Court through Writ Petition seeking to quash the order-in-original and related Form DRC-07, arguing that the Respondent’s actions violated Section 6(2) of the CGST Act by causing duplicative proceedings and jurisdictional conflict.
Issue:
Whether the issuance of multiple show cause notices by different authorities (DGGI, Mumbai, and Deputy Commissioner, CGST, Goa) on the same subject matter and period is legally permissible?
Held:
The Hon’ble Bombay High Court in Writ Petition No. 236 of 2025 held as under:
- Observed that, issuing multiple show cause notices by different authorities on the same subject matter creates chaos, harassment, and conflicting decisions, violating principles of fairness and Article 14 of the Constitution.
- Observed that, the Respondent’s order-in-original dated January 30, 2025, duplicated proceedings by addressing the same period and issues already under DGGI’s purview.
- Held that, the proceedings by the Deputy Commissioner, CGST, Goa, should have been transferred to DGGI, Mumbai, for adjudication, as the DGGI’s SCN was on an all-India basis.
- Directed that, the order-in-original and Form DRC-07, both dated January 30, 2025, be quashed.
Our Comments:
The Bombay High Court’s ruling reinforces the need for jurisdictional coordination in GST administration to prevent harassment and conflicting decisions, aligning with the constitutional guarantee of equality under Article 14. The decision to quash the Goa authority’s order due to overlapping proceedings with the DGGI’s all-India investigation promotes procedural efficiency.
The Supreme Court in Kusum Ingots & Alloys Ltd. [(2004) 6 SCC 672], held that a writ petition is maintainable where a part of the cause of action arises, including the location of the authority passing the order or where its effect is felt. The Court in that case held that that jurisdictional scope under Article 226(2) depends on the authority’s location or the order’s impact, not the affected person’s residence. This reasoning aligns with the current case, as the Court addressed the jurisdictional overlap caused by the Goa authority’s actions despite the DGGI’s prior cognizance and the Karnataka High Court’s stay.
Relevant Provisions:
Section 6 of the CGST Act, 2017
6. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances-
(1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.
Section 74, of the CGST Act, 2017
“74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful- misstatement or suppression of facts.-
(1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice.
(2) The proper officer shall issue the notice under sub-section (1) within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund. …”
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