State Assessments Quashed as Parallel Proceedings on Periods Already Sub Judice Are Impermissible.

Issue

Whether assessment orders passed by a State GST authority are legally valid when the tax periods and subject matter in question are already under adjudication (or sub judice) as a result of proceedings initiated by the Central GST authorities.

Facts

The Central GST authorities (DGGI) had already conducted an investigation on the petitioner for the period of July 2017 to December 2021 regarding the misclassification of parottas.
This Central proceeding resulted in an Order-in-Original. An appeal against this order was dismissed, and the matter is currently sub judice (pending) in a writ petition before the Madras High Court.
While the High Court case was pending, the State GST authority initiated separate, parallel assessment proceedings for the financial years 2019-2020 and 2020-2021.
These tax periods (2019-20 and 2020-21) were a subset of the larger period (2017-2021) already covered by the Central investigation and the pending High Court case.
The State authority proceeded to issue its own assessment orders, which the petitioner challenged.
The State did not dispute the fact that its proceedings covered the same periods that were already under judicial review.

Decision

The High Court set aside (quashed) the impugned assessment orders passed by the State authority for FY 2019-2020 and FY 2020-2021.
It was held that initiating parallel State assessments for the same tax periods that are already sub judice due to Central proceedings is impermissible under the GST law.
The court noted that such parallel proceedings could potentially result in double taxation on the same subject matter.
This action violates the statutory scheme of cross-empowerment under Section 6 of the CGST Act, which is designed to prevent dual control.

Key Takeaways

No Parallel Proceedings: The GST law (specifically Section 6) prohibits parallel or simultaneous proceedings by both Central and State authorities on the same subject matter for the same tax period.
First Proceeding Holds Jurisdiction: The authority that initiates proceedings first (in this case, the Central DGGI) retains jurisdiction to carry the matter to its logical conclusion, including all subsequent appeals.
“Sub Judice” Bars New Action: Once an issue is under judicial review (i.e., sub judice) before a High Court, the other tax authority cannot initiate a new, parallel assessment on the same issue for the same period.
Risk of Double Taxation: The court’s decision prevents an outcome where a taxpayer could be subjected to two separate demands for the same alleged tax short-payment, which is contrary to law.

HIGH COURT OF ANDHRA PRADESH

ID Fresh Food (India) (P.) Ltd.

Assistant Commissionerst, (ST)

R. Raghunandan Rao and Challa Gunaranjan, JJ.

WRIT PETITION Nos. 21702 of 2024 & 12294 of 2025
IA NOS. 1 & 2 OF 2024 and 1 & 2 OF 2025

SEPTEMBER 10, 2025

ORDER

R. Raghunandan Rao, J.- As the issues raised in both these Writ Petitions are one and the same, they are being disposed of by way of this Common Order.

2. Heard Sri Raghavan Ramabadran, learned counsel appearing on behalf of Sri Lakshmi Kumaran Sridharan, learned counsel for the petitioner and the Learned Government Pleader for Commercial Tax appearing for the 1^st respondent and Smt. Santhi Chandra, Learned Senior Standing Counsel appearing for the respondents 2 & 3.

3. The petitioner is a registered person and the assessments in relation to the petitioner were to be carried out by the State authority. However, the 2^nd respondent-Additional Director, DGGI, Chennai Zonal Unit had initiated proceedings against the petitioner, for the period July-2017 to December-2021, on the issue of misclassification of parottas by the petitioner and the non-payment of appropriate tax by the petitioner. These proceedings, initiated under the show-cause notice, dated 19.04.2022, culminated in an order-in-original, dated 30.11.2022, passed by the Commissioner of GST and Central Excise Chennai South. The appeal filed by the petitioner against this order was dismissed by way of an order-in-appeal, dated 29.02.2024. Thereafter, the petitioner had approached the Hon’ble High Court of Madras by way of M.Karuppaiah v. District Collector [W.P. No. 14791 of 2024], which is said to be pending.

4. In parallel proceedings, the 1^st respondent-Assistant Commissioner (ST), Penamaluru Circle, initiated assessment proceedings against the petitioner for the financial year 2019 & 2020 and passed an Order of assessment, dated 27.08.2024, against the petitioner. Aggrieved by the said Order, the petitioner has approached this Court by way of W.P.No.21702 of 2024. Similarly, the 1^st respondent-Assistant Commissioner ST, Penamaluru Circle had initiated assessment proceedings for the financial year 2020-2021, which culminated in an order-in-original dated 25.02.2025. Aggrieved by this Order, the petitioner has approached this Court by way of W.P.No.12294 of 2025.

5. In both these Writ Petitions, the primary ground of challenge, of the petitioner, is that the 1^st respondent-Assistant Commissioner (ST) was seeking to conclude assessment proceedings and raise demands of tax, against the petitioner, in relation to a period for which the Commissioner of GST and Central Excise Chennai South had already passed Orders of assessment and which were presently under challenge before the Hon’ble High Court of Madras, in W.P.No.14791 of 2024.

6. The respondents have not filed any counter affidavits in W.P.No.12294 of 2025. However, a counter affidavit has been filed in W.P.No.21702 of 2024.

7. The petitioner had raised the contention of parallel proceedings of assessment in paragraph No.31 of the affidavit filed in support of the Writ Petition in W.P.No.21702 of 2024. In reply to this paragraph No.31, the 1^st respondent only took the stand that certain reliefs had been granted to the petitioner and the petitioner cannot have any complaint on this basis. The pleadings in the said counter affidavit clearly show that the 1^st respondent does not dispute the fact that the impugned assessment orders are in relation to a period which is already before the Hon’ble High Court of Madras on account of the Order passed by the Commissioner of GST and Central Excise Chennai South, dated 30.11.2022 and subsequent, the order-in-appeal dated 29.02.2024.

8. In the circumstances, this would be a case of double taxation, levied on the petitioner, for the same periods of the assessment. Such a course of action would be clearly impermissible.

9. In the circumstances, these Writ Petitions are allowed setting aside the order of assessment, for the period 2019-2020, dated 27.08.2024, passed by the 1^st respondent and the order of assessment, for the period 2020-2021, dated 25.02.2025, passed by the 1^st respondent.

10. However, it would be left open to the respondents to agitate their claims and contentions before the Hon’ble High Court of Madras, which would have already seized up the matter, in W.P.No.14791 of 2024. There shall be no order as to costs.

11. As a sequel, pending miscellaneous applications, if any, shall stand closed.