The Himachal Pradesh High Court addressed a case involving M/s Saraswati Spinning and Weaving Mills, where both Central GST and State GST authorities issued show cause notices and initiated adjudication proceedings for the same periods and alleged tax liabilities. This led to the petitioner challenging the parallel proceedings under Section 6(2)(b) of the CGST Act, which bars such actions. The petitioner relied on the Supreme Court's decision in Armour Security (India) Ltd. v. Commissioner, CGST, which provides guidelines against simultaneous proceedings by different GST authorities.
The central issue was whether the parallel adjudicatory proceedings by both Central and State GST authorities were permissible under the CGST Act. The High Court ruled that once one GST authority initiates proceedings, parallel adjudication by another authority on the same subject is not allowed. The Court applied the Supreme Court's guidelines from the Armour Security case, emphasizing the need for coordination between Central and State authorities to prevent overlapping proceedings.
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The Court directed the petitioner to respond to the show cause notice from the authority that initiated proceedings first. It also instructed the GST authorities to coordinate to avoid conducting overlapping adjudications. Finally, the petitioner was given the liberty to challenge any final orders passed, in accordance with the law. This decision reinforces the importance of coordination between different GST authorities to ensure compliance with statutory provisions and judicial guidelines.
Parties: M/s Saraswati Spinning and Weaving Mills v. State of Himachal Pradesh & Ors.
Order Date: 07 January 2026
Facts –
- The petitioner was subjected to show cause notices and adjudication proceedings by both Central GST and State GST authorities for overlapping periods and alleged tax liabilities.
- Orders and notices in Forms DRC-01 and DRC-07 were issued by the Central authorities, while the State authorities had also initiated proceedings on the same subject matter.
- The petitioner contended that such parallel proceedings were barred under Section 6(2)(b) of the CGST Act.
- Reliance was placed on the Supreme Court judgment in Armour Security (India) Ltd. v. Commissioner, CGST, laying down binding guidelines on parallel GST proceedings.
Issue –
- Whether parallel adjudicatory proceedings by Central and State GST authorities on the same subject matter are permissible in view of Section 6(2)(b) of the CGST Act?
Order –
- The High Court held that once adjudicatory proceedings are initiated by one GST authority, parallel adjudication by the other authority on the same subject matter is barred.
- The Court reiterated and applied the principles and guidelines laid down by the Supreme Court in Armour Security (India) Ltd.
- The petitioner was directed to respond to the show cause notice before the authority which initiated proceedings first in point of time.
- The Central and State GST authorities were directed to coordinate inter se to ensure that no overlapping adjudicatory proceedings are conducted.
- Liberty was reserved to the petitioner to challenge any final order passed, in accordance with law.
