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

Background and Issue:
The petitioner approached the Himachal Pradesh High Court under Article 226 of the Constitution, challenging the initiation of proceedings by the Central GST authorities on the ground that the State GST authorities had already commenced inquiry on the same subject matter. The petitioner relied on Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act), which prohibits parallel proceedings on the same subject matter by different tax authorities.

Reference to Supreme Court Precedent:
The Court noted that the issue of parallel proceedings under Section 6(2)(b) of the CGST Act has been conclusively addressed by the Supreme Court in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr., AIR 2025 SC 3854. The Supreme Court clarified that once proceedings are initiated by either the Central or State GST authority, the other authority is barred from commencing parallel adjudicatory proceedings on the same subject matter. The Supreme Court also issued detailed guidelines regarding the scope of ‘initiation of proceedings’, the meaning of ‘subject matter’, and the coordination required between Central and State GST authorities.

Court’s Analysis and Application:
The High Court examined the sequence of summons and notices issued by both Central and State authorities. It observed that the petitioner had received summons from both authorities regarding the same subject matter. Applying the Supreme Court’s conclusions, the High Court held that parallel adjudicatory proceedings are impermissible, but bona fide investigative steps such as issuance of summons are allowed unless they amount to formal initiation of adjudicatory proceedings.

The Court emphasized that the authorities must coordinate to avoid duplication and multiplicity of proceedings, as mandated by the Supreme Court. The petitioner was directed to comply with the summons and present all relevant contentions and documents before the authorities. The authorities, in turn, were instructed to communicate and verify the petitioner’s claims to ensure that only one adjudicatory process proceeds on the same subject matter.

Directions and Outcome:
The writ petition was disposed of with specific directions: (i) the petitioner must appear before the Central Authority and raise all contentions with supporting documents; (ii) the petitioner must also comply with the State Authority’s summons and inform them of any show cause notice issued; (iii) the State and Central authorities must coordinate to verify the overlap and avoid multiple adjudicatory processes; (iv) the adjudicatory authority must proceed in accordance with law, ensuring the petitioner is heard.

The Court clarified that it had not expressed any opinion on the merits of the allegations or the validity of the show cause notice or summons. All rights and contentions of the parties were kept open, and the authorities were expected to consider the Supreme Court’s decision in Armour Security while proceeding.

This judgment reinforces the statutory bar on parallel GST proceedings and mandates strict adherence to the Supreme Court’s guidelines to ensure fair and efficient tax administration.