Vertilink Media Solutions Private Limited v. Anti Evasion Branch & Ors.

What happened

The petitioner supplies script services to Zee Entertainment Enterprises Ltd. A search was carried out on 3 March 2021 at its office and at the residence of its director, and the investigation was then dealt with by the DGGI, Mumbai Zonal Unit. On 31 March 2023 the DGGI issued a common show cause notice to forty-five noticees, including the petitioner and its former director, under the CGST, Maharashtra GST and IGST Acts for fraudulent availment of input tax credit. Separately, the Sales Tax Officer, Delhi issued a notice on 29 May 2024 under section 73 for April 2019 to March 2020, alleging that the correct tax liability had not been declared. The petitioner replied on 28 June 2024, relying on section 6(2)(b). By the order of 29 August 2024 the officer denied input tax credit under section 16(2)(c) on the ground that the suppliers had not paid tax, and created a demand of ₹10,57,75,250. The petitioner did not appeal, but filed a rectification application on 7 April 2025. In the DGGI proceedings the main noticee paid the entire credit demanded with interest and penalty at 25 per cent, so the proceedings against the other noticees were treated as concluded under Explanation 1(ii) to section 74. The writ petition was instituted in August 2026.

Questions before the court

• Was the section 73 notice and order barred by section 6(2)(b) because of the earlier DGGI proceedings, and could the writ be entertained at all?

Why the court ruled this way

The Court first held that an efficacious statutory appeal against the order of 29 August 2024 had not been availed, that the petitioner had shown no ground to bypass it, and that the writ suffered from unexplained delay and laches, because a pending rectification application neither extends limitation nor explains the delay (paragraphs 23–27, 46–47). On merits, section 6 cross-empowers central and State officers but seeks to avoid multiplicity of proceedings on the same subject matter, and the expression "same subject matter" is central; that two proceedings concern the same assessee, overlapping periods or a common factual background is not enough (paragraphs 29–30). The section 73 notice was about the correct tax liability for a specified period and the admissibility of credit under section 16(2)(c), whereas the DGGI notice was under section 74 and concerned fraudulent availment of credit without supply of goods or services, so the provisions invoked, the nature of the allegations and the liability differ materially (paragraphs 32–38). The conclusion of the DGGI proceedings, on the payment by the principal noticee, directed no tax, interest or penalty against the petitioner and so cannot extinguish the separate liability, and section 75(13) was not attracted since no prior penalty for the same act or omission was shown (paragraphs 40–45). The transfer of an investigation from one branch to the DGGI cannot, without identity of subject matter, oust the jurisdiction of another proper officer, and Amit Gupta recognises the bar only where the subject matter is the same (paragraphs 49–50).

Controlling point

The bar on parallel proceedings in section 6(2)(b) is confined to the same subject matter; common transactions, periods or parties do not bring it into play, and a taxpayer who lets the appeal period lapse cannot use a late writ to reopen a section 73 demand.

Order and next steps

The writ petition was dismissed as devoid of merit on the four grounds recorded: want of an appeal, unexplained delay and laches, the proceedings not being on the same subject matter, and section 75(13) not being attracted. The petitioner may, in accordance with law, avail such remedy as is open against any order on its pending rectification application, if maintainable. All pending applications were closed.

Practical implications

A taxpayer facing two notices from different GST authorities should compare the provisions invoked, the periods and the specific allegations in each, and should not assume that a common set of transactions is enough to invoke section 6(2)(b). An order that is not appealed within time is difficult to attack later by a writ.

Limits of this ruling

• The Court considered the challenge only to decide whether the extraordinary writ jurisdiction should be exercised, and it said that its observations are not an opinion on any issue that may arise before the competent authority on the rectification application.