Delhi High Court Clarifies Section 6(2)(b) CGST Act Bar on Parallel Proceedings Applies Only to Same Subject Matter and Assessment Period

In a significant judgment delivered on April 23, 2026, the Delhi High Court addressed the scope of the statutory bar under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act) concerning parallel proceedings for tax demands arising from different assessment periods and distinct infractions.

The petitioner, a partnership firm engaged in the supply of scientific products and registered under the GST regime, challenged an order confirming a demand of Rs. 12,11,258 for the financial year 2018–2019. This demand was raised under Section 74 of the CGST Act, based on allegations of wrongful availment of input tax credit (ITC) on the strength of invoices from a non-existent entity. The petitioner contended that these proceedings were barred by Section 6(2)(b) of the CGST Act, citing an earlier show cause notice and confirmed demand under Section 73 of the State GST Act for the financial year 2019–2020, which related to alleged discrepancies in the declaration of tax liability and excess ITC claims.

The core issue before the Court was whether the bar on parallel proceedings under Section 6(2)(b) of the CGST Act applied in circumstances where the proceedings pertained to different financial years and distinct alleged infractions.

The Court undertook a detailed analysis of the statutory scheme, emphasizing that Section 6(2)(b) is designed to prevent duplicative proceedings only in respect of the same subject matter. The Court clarified that the bar is not absolute and is triggered solely when both proceedings concern the same specific tax liability, arise from the same set of facts, and relate to the same contravention or infraction for the same assessment period.

Upon examining the show cause notices and orders in question, the Court found that the proceedings under Section 73 related to the financial year 2019–2020 and were based on discrepancies in annual returns, while the proceedings under Section 74 pertained to the financial year 2018–2019 and were premised on allegations of fraudulent ITC claims involving a non-existent supplier. The Court noted that not only were the assessment periods different, but the nature of the infractions was also distinct—Section 73 addresses cases without fraud or willful misstatement, whereas Section 74 is invoked for allegations involving fraud or suppression.

The Court concluded that the necessary ingredients to attract the bar under Section 6(2)(b) were not satisfied, as the two sets of proceedings did not relate to the same subject matter, facts, or assessment period. Accordingly, the impugned proceedings under Section 74 were not hit by the statutory prohibition against parallel proceedings.

The petitioner also argued that the impugned order violated Section 75(4) of the CGST Act by failing to consider its submissions and by not granting a personal hearing. The Court, however, found that the petitioner’s contentions had been duly considered in the order and that there was no violation of the principles of natural justice. The Court further observed that the petitioner had an efficacious alternative remedy by way of appeal under Section 107 of the CGST Act.

In dismissing the writ petition, the Court clarified that the period during which the petitioner pursued proceedings before the High Court would be excluded for the purpose of computing limitation before the appellate authority.

This judgment provides authoritative guidance on the interpretation of Section 6(2)(b) of the CGST Act, affirming that the statutory bar on parallel proceedings is confined to cases involving the same subject matter and assessment period, and does not extend to distinct infractions arising in different financial years.