Himachal Pradesh High Court Clarifies Bar on Parallel GST Proceedings Under Section 6(2)(b) Following Supreme Court Guidelines

In a significant ruling, the Himachal Pradesh High Court has clarified the legal position regarding the initiation of parallel proceedings by Central and State GST authorities under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act). The Court, comprising Justice Vivek Singh Thakur and Justice Ranjan Sharma, disposed of a writ petition challenging the issuance of a show cause notice by the Central GST authority when proceedings on the same subject matter had already been initiated by the State GST authority.

The petitioner invoked Article 226 of the Constitution, seeking to quash proceedings and a show cause notice issued by the Central GST authority, contending that these were without jurisdiction and contrary to Section 6 of the CGST Act and the Himachal Pradesh GST Act. The core issue before the Court was whether Section 6(2)(b) prohibits the initiation of parallel proceedings on the same subject matter by different GST authorities.

The Court noted that the Supreme Court, in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr., AIR 2025 SC 3854, had already settled the issue. The Supreme Court held that Section 6(2)(b) bars the initiation of any proceedings on the same subject matter once proceedings have been initiated by either the Central or State GST authority. The Supreme Court further clarified the scope of ‘initiation of proceedings’, the meaning of ‘subject matter’, and the inter-relationship between Central and State GST authorities. It was emphasized that only the formal commencement of adjudicatory proceedings—such as the issuance of a show cause notice—constitutes ‘initiation of proceedings’ under Section 6(2)(b), and not mere investigative steps like summons or searches.

The High Court observed that, in the present case, the State GST authority had initiated proceedings as early as 2018, and the subsequent show cause notice and related actions by the Central GST authority pertained to the same subject matter. The Court applied the Supreme Court’s conclusions and guidelines, which require authorities to coordinate and avoid duplication, and to ensure that the taxpayer is not subjected to multiple adjudicatory processes for the same contravention.

In its operative directions, the Court instructed the petitioner to appear before the Central Authority and respond to the show cause notice, raising all relevant contentions and documents as per the Supreme Court’s guidelines. The petitioner was also directed to comply with all summons and notices, and to inform the State authorities about the ongoing proceedings. The State and Central authorities were directed to communicate and verify the petitioner’s claims, coordinate to prevent multiple proceedings on the same subject matter, and proceed in accordance with law, ensuring the petitioner is afforded an opportunity of being heard.

The Court made it clear that it had not expressed any opinion on the merits of the allegations or the validity of the show cause notice or summons, and that all rights and contentions of the parties remain open. The judgment reinforces the binding nature of the Supreme Court’s interpretation of Section 6(2)(b) and underscores the importance of coordination between GST authorities to prevent harassment and multiplicity of proceedings for taxpayers.