The High Court of Himachal Pradesh addressed the issue of parallel GST adjudication in the case involving M/s H.M. Steels Limited. The company faced proceedings from both State GST and Central GST authorities on the same tax matters. The petitioner argued that under Section 6(2)(b) of the CGST Act, once one authority initiates action, parallel proceedings by another are barred.
The Court referenced the Supreme Court's decision in the Armour Security case, clarifying that "initiation of proceedings" refers to the issuance of a show cause notice rather than preliminary steps like summons or investigations. It emphasized that parallel adjudicatory proceedings on the same subject matter are prohibited to prevent duplication and taxpayer harassment. Coordination between authorities is necessary, and once overlap is identified, only one authority should continue with the proceedings.
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While the Court did not quash the ongoing proceedings, it provided procedural directions. It required the petitioner to cooperate and present objections to the authorities, who must then adhere to Supreme Court guidelines to avoid duplication of efforts. This ruling underscores the importance of coordination between State and Central GST authorities to ensure fair and efficient tax adjudication processes.
Order Date - 09 April 2026
Parties: M/s H.M. Steels Limited Vs Joint Commissioner, State Taxes & Excise and Directorate General of GST Intelligence (Central Authority)
Facts -
- M/s H.M. Steels Limited was first subjected to State GST proceedings, including summons and DRC-01A intimation regarding alleged tax issues.
- Subsequently, Central GST authorities also issued summons on the same matter, prompting the petitioner to challenge this as duplicate action.
- The petitioner argued that Section 6(2)(b) of the CGST Act prohibits parallel proceedings once one authority has already initiated action.
- Authorities responded that they would follow Supreme Court guidelines and coordinate to avoid duplication of proceedings.
Issue -
Whether Central GST authorities can initiate proceedings when State GST authorities have already acted on the same subject matter?
Order -
- The Court relied on the Supreme Court ruling in Armour Security case, clarifying that “initiation of proceedings” means issuance of a show cause notice, not merely summons or investigation steps.
- It was observed that parallel adjudicatory proceedings on identical subject matter are strictly prohibited, as they lead to duplication and harassment of taxpayers.
- The Court highlighted that coordination between authorities is mandatory, and once overlap is established, only one authority should proceed further.
- The Court did not quash proceedings outright but issued procedural directions, requiring the petitioner to cooperate and raise objections before authorities, who must then act as per Supreme Court guidelines.
