Delhi High Court Clarifies State GST Authority Cannot Proceed Where CGST Authority Has Prior Jurisdiction Under Section 6 of CGST Act

In a significant ruling, the Delhi High Court addressed the issue of overlapping jurisdiction between the Central and State GST Authorities under the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner challenged an order dated 18th December 2025, passed by the State GST Authority, which was based on a demand-cum-show cause notice dated 2nd July 2025. The core contention was that the Central GST Authority had already initiated proceedings for the same period and entities through a prior show cause notice dated 28th June 2025.

The petitioner argued that, in light of Section 6 of the CGST Act, once the Central GST Authority had seized jurisdiction by issuing a show cause notice, the State GST Authority was precluded from proceeding further in respect of the same subject matter. The petitioner had also formally objected to the continuation of proceedings before the State Authority and brought the prior show cause notice to its attention. Despite this, the State GST Authority proceeded to assess the tax liability and passed the impugned order.

The Central GST Authority supported the petitioner’s position, emphasizing that its proceedings, being prior in time, should prevail and that the State Authority was required to refrain from parallel action. The State GST Authority, on the other hand, contended that it could proceed independently and that the petitioner had not initially provided the relevant details of the Central Authority’s notice. It was also argued that the petitioner had an alternate remedy of appeal.

Upon review, the High Court found that there was clear overlap between the entities covered by the two show cause notices and that the Central GST Authority’s notice was indeed prior in time. The Court noted that the petitioner had communicated the existence of the earlier notice to the State Authority, and that all relevant documents were available on the GST portal, accessible to both authorities. The Court held that the State GST Authority was duty-bound to verify the existence of prior proceedings on the portal and to respect the statutory mandate of Section 6 of the CGST Act, which prohibits parallel proceedings by the State Authority where the Central Authority has already initiated action.

The Court concluded that the State GST Authority’s failure to consider the petitioner’s objection and the existence of the prior Central GST proceedings rendered its order without jurisdiction. Accordingly, the impugned order dated 18th December 2025 was quashed and set aside. The show cause notice issued by the State GST Authority was directed to be kept in abeyance. The Central GST Authority was directed to complete its adjudication within four months, after which the State Authority could reconsider its own proceedings in accordance with Section 6 of the CGST Act.

This judgment reinforces the statutory scheme under the CGST Act, ensuring that taxpayers are not subjected to multiple proceedings for the same matter by different authorities, and clarifies the primacy of the authority that first initiates action under the Act.