The Himachal Pradesh High Court addressed a case involving M/s H.M. Steels Ltd., which challenged multiple GST show cause notices from both Central and State GST authorities. The issue centered on allegations of wrongful Input Tax Credit (ITC) claims. The petitioner contended that it had fulfilled its tax obligations and possessed valid purchase documents, arguing that it should not be responsible for ensuring its suppliers' tax compliance.
Read more: Supreme Court - Input Tax Credit cannot be claimed if the supplier has not deposited the tax, and the provision imposing this condition is constitutionally valid [Order attached]
During the proceedings, both the Central and State authorities agreed to reassess the situation, taking into account new submissions and documents from the petitioner. This agreement was influenced by the Supreme Court's decision in Armour Security (India) Ltd., which clarified that overlapping GST adjudications are not permissible under Section 6(2)(b) of the CGST Act.
The High Court ruled that simultaneous adjudication by both authorities on the same subject matter is not allowed once proceedings are initiated. The petitioner was instructed to provide detailed replies and supporting documents to both authorities, which must determine if the cases overlap. If so, they must decide within four weeks who will continue the adjudication, following the Supreme Court's principles to avoid duplication.
Once the competent authority is identified, it must review the petitioner's submissions and issue a reasoned order within six weeks. The court disposed of the writ petition with these directions, emphasizing the need for a coordinated approach to prevent redundant legal proceedings.
Order Date - 16 July 2026
Parties: M/s H.M. Steels Ltd. Vs Union of India & Others
Facts -
- Petitioner M/s H.M. Steels Ltd. challenged multiple GST show cause notices issued by both the Central and Himachal Pradesh State GST authorities alleging wrongful availment of Input Tax Credit (ITC), claiming that the notices were issued without properly verifying the facts.
- The petitioner argued that it had paid GST to its suppliers, possessed all valid purchase documents, and could not be compelled to prove whether the suppliers had ultimately deposited the tax with the Government.
- Instead of seeking immediate quashing of the notices, the petitioner requested that the authorities reconsider the matter after examining documents relating to genuine purchases, supplier registration status, and compliance with statutory requirements.
- During the hearing, both Central and State authorities agreed to consider a fresh reply with supporting documents, while acknowledging that the issue would be governed by the Supreme Court's ruling in Armour Security (India) Ltd. regarding overlapping GST proceedings.
Issue -
- Whether both Central and State GST authorities can simultaneously continue adjudication on the same GST subject matter?
Order -
- The High Court observed that the controversy is already governed by the Supreme Court's decision in Armour Security (India) Ltd., which explains the scope of Section 6(2)(b) of the CGST Act. The judgment makes it clear that parallel adjudicatory proceedings on the same subject matter are not permissible once a show cause notice has formally initiated proceedings.
- The Court held that the petitioner must first submit detailed replies along with all supporting documents before both the Central and State GST authorities. The authorities are required to examine whether the proceedings relate to the same subject matter before deciding which authority will continue the adjudication.
- The Court directed that if both notices concern the same tax liability or contravention, the Central and State authorities must mutually decide, within four weeks, which authority will proceed further. This exercise must strictly follow the principles laid down by the Supreme Court to avoid duplication of proceedings.
- The Court further directed that once the competent authority is identified, it must consider the petitioner's reply, supporting evidence, and relevant submissions, and thereafter pass a speaking and reasoned order in accordance with law within six weeks. The writ petition was accordingly disposed of with these directions.
