HC Quashes OIO as Parallel GST SCNs Could Lead to Conflicting Decisions

Case Details: HM Leisure vs. Assistant Commissioner of CGST - [2025] 179 taxmann.com 376 (Bombay)

Judiciary and Counsel Details

• Bharati Dangre & Nivedita P. Mehta, JJ.
• V. Raghuraman, Sr. Adv., Bhanu Murthy & S. Savoikar, Advs. for the Petitioner.
• Ms Asha Desai, Sr. Standing Counsel for the Respondent.

Facts of the Case

The petitioner-firm was engaged in providing services in the nature of sporting facilities (bowling) and video games. The petitioner firm’s head office was located in Bangalore, Karnataka, and the Branch office was in Goa. The petitioner firm was registered under the provisions of GST vide GSTN number in the State of Goa. In the year 2019, the business premises of the petitioner firm were searched by the Anti Evasion Wing of CGST, Goa Commissionerate, and certain documents were seized. The Assistant General Manager of the petitioner firm (Bangalore head office) was recorded, and accordingly, summons were issued to a partner of the petitioner firm to appear before the Authorities. Demand and Recovery Case (DRC) – 01A Form was issued informing that the petitioner is liable to pay GST for the period 2017-18 to 2019-20 (Oct, 2019) on the allegation that the services of gaming facilities like video gaming through virtual gaming machines and bowling gaming facility are liable to 28% GST. The petitioner preferred a reply to Form DRC-01A stating that the GST rate of 28% is applicable only for admission to casinos, betting and gambling. Further, relying on the CBIC Circular dated 06.10.2021, it was stated that services provided by the petitioner firm are classifiable under entry 34(iii), which is chargeable to GST @18%. However, the Department was not satisfied with the reply. Therefore, a show cause notice was issued to the petitioner, and the matter was adjudicated. The authority confirmed the demand along with interest and penalty. Aggrieved by the order, the petitioner filed a writ petition before the Bombay High Court.

High Court Held

The High Court held that if multiple show cause notices are issued and conferring jurisdiction on a plurality of officers on the same subject matter, it would result in chaos, harassment, contrary and conflicting decisions. The show cause notice issued by DGGI for the same period and on the same subject matter was pending before the High Court of Karnataka (which includes the turnover of Goa Branch). Therefore, no adjudication should have been carried out by the authority, as it would result in duplication of proceedings or multiplicity of proceedings on the same issue for the same period. In other words, the subject proceedings should have been transferred to the DGGI for further adjudication since the notice issued by DGGI is on an all-India basis (including Goa Branch).

List of Cases Reviewed

• Kusum Ingots & Alloys Ltd. v. UOI (2004) 6 SCC 254 (para 24) followed

List of Cases Referred to

• Kusum Ingots & Alloys Ltd. v. UOI (2004) 6 SCC 254 (para 17).