GST
TRT-2025-
Supreme court of India
Date:-11-07-25
In:-
Issue Favourable to Tax Payer ?:-
Order dated: 11 Jul 2025
Parties: Directorate of Enforcement v. M/s XYZ Ltd. & Ors.
Facts -
- Petitioner: M/s Armour Security (India) Ltd., a public limited company providing security services, registered under Delhi GST.
- Received SCN on 18.11.2024 from State GST authority (Respondent No. 2) for FY 2020–21 demanding ₹1.24 crore (CGST, SGST, IGST) plus interest & penalty for under-declared tax due to turnover mismatch in returns & e-way bill data and excess ITC claim.
- On 16.01.2025, search conducted by Central GST (Respondent No. 1) under Section 67(2) CGST Act; electronic devices/documents seized; summons issued under Section 70 to directors.
- on 23.01.2025: Second summons issued to a director for documents.
- Petitioner informed that State GST was already investigating same issues (ITC from cancelled suppliers) and sought release of seized items.
- The Petitioner filed writ in Delhi HC challenging summons, citing bar under Section 6(2)(b) CGST Act (no parallel proceedings on same subject matter by both State & Central).
Issue -
- Whether issuance of summons under Section 70 CGST Act amounts to “initiation of proceedings” under Section 6(2)(b) CGST Act, thus barring Central GST from acting when State GST has already initiated proceedings on the same subject matter.
order -
- The Supreme Court held that issuance of summons under Section 70 CGST Act is part of an inquiry for evidence collection and does not constitute “initiation of proceedings” under Section 6(2)(b).
- The bar under Section 6(2)(b) applies only to parallel adjudicatory proceedings such as assessment, demand, and penalty, not to investigative actions.
- Cross-empowerment provisions allow both Central and State GST authorities to conduct intelligence-based enforcement irrespective of administrative allocation, while adjudication remains with a single authority to ensure a single interface.
- Even where the subject matter overlaps, concurrent inquiries are permissible so long as only one authority undertakes the final adjudication; the summons in this case were lawful and within jurisdiction. Thus, it was held that Section 70 inquiries are not barred even if another authority is adjudicating on the same issue.
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