The Himachal Pradesh High Court addressed a tax dispute involving M/s. Radha Krishan Industries and the GST authorities. The company challenged a Show Cause Notice from the Central GST authorities, issued on August 2, 2024, arguing that the State GST authorities had already initiated proceedings on the same matter in 2018. The petitioner cited Section 6(2)(b) of the CGST Act, which prohibits parallel proceedings on the same subject, claiming the Central authorities lacked jurisdiction.
Both GST authorities agreed to comply with a Supreme Court judgment in Armour Security (India) Ltd. v. Commissioner, CGST, which clarifies handling overlapping GST investigations and adjudications. The Court examined whether the Central GST proceedings constituted impermissible parallel adjudication on an issue already addressed by the State GST department.
The Court relied on the Supreme Court ruling in Armour Security, emphasizing that Section 6(2)(b) bars parallel adjudicatory proceedings on the same tax liability. While investigations may continue, overlapping Show Cause Notices cannot proceed before different authorities. The Court highlighted the importance of avoiding duplication, conflicting findings, and taxpayer harassment.
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The Court instructed that once one authority initiates proceedings, the other must exercise restraint and ensure coordination. Taxpayers should disclose ongoing investigations to facilitate inter-departmental coordination. Instead of quashing the proceedings, the Court directed the petitioner to present objections based on the Armour Security judgment. The Central and State GST authorities were ordered to communicate and prevent multiple adjudicatory proceedings on the same issue.
Order Date - 05 May 2026
Parties: M/s. Radha Krishan Industries Vs Union of India, Central GST Authorities and State GST Authorities, Himachal Pradesh
Facts -
- M/s. Radha Krishan Industries approached the Himachal Pradesh High Court challenging a Show Cause Notice issued by the Central GST authorities on 02.08.2024, arguing that the State GST authorities had already initiated proceedings on the same dispute as early as 2018.
- The petitioner contended that Section 6(2)(b) of the CGST Act prohibits parallel proceedings on the same subject matter, and therefore the later proceedings initiated by the Central authorities lacked jurisdiction.
- During the hearing, both the Central and State GST authorities informed the Court that they would comply with the Supreme Court judgment in Armour Security (India) Ltd. v. Commissioner, CGST, which clarified how overlapping GST investigations and adjudications should be handled.
- The Court examined the timeline of notices and summons issued by both authorities and found that the controversy mainly revolved around whether the Central GST proceedings amounted to impermissible parallel adjudication against an issue already examined by the State GST department.
Issue -
- Whether the Central GST authorities could continue adjudicatory proceedings through a Show Cause Notice when the State GST authorities had already initiated proceedings earlier on the same subject matter?
Order -
- The Court relied heavily on the Supreme Court’s ruling in Armour Security, which clarified that Section 6(2)(b) bars initiation of parallel adjudicatory proceedings on the same tax liability or contravention. The Court observed that while investigation-related actions like summons or inquiry may continue, formal adjudication through overlapping Show Cause Notices cannot proceed simultaneously before different authorities.
- The Bench emphasized that the purpose behind Section 6(2)(b) is to avoid duplication of proceedings, conflicting findings, and unnecessary harassment to taxpayers. It noted that once one authority initiates proceedings first in point of time, the other authority must exercise restraint and coordinate rather than create overlapping adjudication mechanisms.
- The Court further observed that taxpayers also carry a responsibility to disclose before one authority that another authority is already investigating or adjudicating the same issue. Such disclosure enables inter-departmental coordination and ensures compliance with the framework laid down by the Supreme Court in Armour Security.
- Instead of quashing the proceedings outright, the High Court directed the petitioner to appear before the authorities and raise all objections based on the Armour Security judgment. The Court ordered both Central and State GST authorities to communicate with each other and ensure that the petitioner is not subjected to multiple adjudicatory proceedings on the same subject matter.
