The Hon’ble High Court of Himachal Pradesh (“the Hon’ble Court”) while deciding on issue related to parallel proceedings in GST by Centre and State tax authorities on same subject matter, has held that no further adjudication is required, except complying with the directions of the Hon’ble Supreme Court in Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr., AIR 2025 SC 3854, when Show Cause Notice is issued by Central GST Authorities after summons/ notice have already been issued by State GST Authorities.

Facts:

1. The State GST Authorities had initiated inquiry on the Petitioner by issuing summons/ notices from 2018. Subsequently, the Central GST Authorities had issued Show Cause Notice dated 02.08.2024 (”SCN”) on the same subject matter.
2. Aggrieved by the initiation of the proceedings by the Central GST Authorities, the Petitioner filed a writ petition before the Hon’ble High Court challenging the issuance of the SCN. The Petitioner contended that the proceedings initiated by the Central GST Authorities pertained to the same subject matter in respect of which the State GST Authorities had already initiated proceedings and therefore, such parallel proceedings were barred under *Section 6(2)(b) of the CGST Act.

Issue: 

Whether the summons/notices issued by the State GST Authorities should prevail upon the summons, DRC-01A and SCN issued by the Central GST Authorities, being ‘parallel proceedings’ barred by Section 6(2)(b) of CGST Act?

Discussion and Ruling:

• The Hon’ble High Court noted that the issue of prohibition against parallel proceedings under Section 6(2)(b) of the CGST Act stood substantially resolved by the Hon’ble Supreme Court in Armour Security (supra), wherein it was held that once one authority (Central or State) had initiated proceedings first in point of time, the other authority was barred from commencing parallel adjudicatory proceedings under Section 6(2)(b) of the CGST Act.
• The Hon’ble Court noted that in the present case, Show Cause Notice, summons and intimation under Form GST DRC-01A had been issued by Central Authority, despite summons/ notices having already been issued by State Authorities.
• Applying the guidelines in Armour Security (supra), the Hon’ble High Court held that no further adjudication was required, except issuing directions consistent with the law declared in Armour Security (supra).
• In view of above discussions, the Hon’ble High Court gave the following directions:
  • The Petitioner was directed to appear before the Central GST Authorities and file the response to the SCN along with all the relevant documents in terms of Armour Security (supra).
  • The Petitioner was also directed to comply with the summons/notices and intimations and inform the State GST Authorities regarding the issuance of the SCN by the Central GST Authorities.
  • The Central and State GST Authorities were directed to coordinate and verify the claims of the Petitioner regarding parallel proceedings and ensure that the Petitioner was not subjected to multiple adjudicatory processes.

*6(2)(b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.

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