In a recent judgment dated October 14, 2025, the Orissa High Court addressed the issue of parallel proceedings under the GST Act, involving M/s Tansam Engineering & Construction Company. The petitioner challenged an order issued by the Central GST authorities, which demanded taxes, interest, and penalties for the fiscal years 2017-18 and 2018-19. This order was contested because the same allegations had already been adjudicated by the State GST authorities.
The case revolved around the issuance of fake invoices and wrongful input tax credit claims through suppliers, which had been previously addressed by the State Proper Officer. Despite this, the Central authorities issued a second show cause notice, leading to the contested order. The petitioner argued that such dual proceedings violated Section 6(2)(b) of the GST Act, which prohibits parallel proceedings on the same matter by State and Central officers.
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The Court examined the legal framework and referred to a Supreme Court ruling, which clarified that once proceedings are initiated by one authority, the other cannot initiate them again. It was noted that the State proceedings were initiated first, and the Central authorities' actions were deemed an impermissible "second proceeding." Consequently, the Court quashed the Central order dated January 30, 2025, and the related summary of orders. The authorities were reminded to act in accordance with the law, ensuring no breach of Section 6(2)(b).
Order date: 14 Oct 2025
Parties: M/s Tansam Engineering & Construction Company v. Commissioner, CGST & Central Excise, Rourkela & Ors.
Facts –
- The petitioner, a registered works contractor under OGST/CGST Acts, challenged the Order-in-Original dated 30.01.2025 issued by the Assistant Commissioner, CGST & Central Excise, Rourkela, raising tax, interest, and penalty under Section 74 of the GST Act for FY 2017–18 and 2018–19.
- Earlier, based on the same allegations of fake invoices and wrongful ITC through suppliers M/s M.G. International and M/s M.S. Traders, proceedings under Section 74 had already been initiated and concluded by the State Proper Officer (Rourkela-II Circle) via orders dated 12.04.2023, with appeals decided in Jan–Feb 2024.
- Despite being informed that the same issue was pending and adjudicated by the State authority, the DGGI, Rourkela issued a second Show Cause Notice dated 13.08.2021, which culminated in the impugned central order of 30.01.2025.
- The petitioner contended that dual adjudication for the same period and transaction violated Section 6(2)(b) of the GST Act, which bars parallel proceedings by State and Central officers on the same subject matter.
Issue –
- Whether a Central Proper Officer can initiate proceedings under Section 74 of the GST Act on the same subject matter for which a State Proper Officer has already initiated and concluded proceedings?
Order –
- The Court examined the scheme of Section 6(2)(b) of the CGST/OGST Acts and the Supreme Court judgment in Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate (2025 SCC OnLine SC 1700), which clarified that once proceedings are initiated by one authority, parallel initiation by the other is impermissible.
- It noted that the State Officer had initiated proceedings first (SCNs dated 02.07.2021 and 30.07.2021), based on information from the Central department, and passed adjudication orders much before the Central authority’s show cause notice dated 13.08.2021.
- The issuance of summons under Section 70 by the Central Officer earlier (in 2019) did not amount to initiation of “proceedings” within the meaning of Section 6(2)(b).
- The Court held that the Central Officer’s order was without jurisdiction, constituting an impermissible “second proceeding” on the same issue already adjudicated by the State authority.
- Consequently, the Order-in-Original dated 30.01.2025 and Summary of Orders dated 31.01.2025 in Form GST DRC-07 were quashed and set aside.
- Liberty was granted to the authorities to act in accordance with law, provided such action does not contravene Section 6(2)(b).
