Central GST Can’t Adjudicate Years Already Under State Scrutiny, Can Proceed on Others.
Issue
When a Central GST authority issues a Show Cause Notice (SCN) covering multiple financial years, but a State GST authority has already initiated proceedings for some of those years, does the jurisdictional bar under Section 6(2)(b) of the CGST Act apply to the entire notice or only to the specific years where the proceedings overlap?
Facts
- The petitioner faced proceedings from both State and Central GST authorities concerning the denial of Input Tax Credit (ITC).
- The State authorities had already issued notices, passed an adjudication order, and an appeal was pending, but only for the financial years 2017-18 and 2018-19.
- Subsequently, the Central authorities issued a comprehensive SCN covering a larger period, from FY 2017-18 to 2022-23, which included the two years already adjudicated by the State.
- The petitioner challenged the Central authority’s jurisdiction, citing the bar on parallel proceedings under Section 6(2)(b), but did not object to the proceedings for the years not covered by the State’s action.
Decision
The High Court delivered a bifurcated judgment:
- For the Overlapping Years (FY 2017-18 and 2018-19):
- The court did not quash the Central SCN at the writ stage but directed the petitioner to submit all details of the State proceedings (orders and pending appeals) to the Central authority.
- It mandated the Central authority to consider these submissions and decide its jurisdiction for these two years strictly in accordance with the law laid down by the Supreme Court in the Armour Security case, which prohibits parallel proceedings.
- For the Non-Overlapping Years (FY 2019-20 to 2022-23):
- The court held that the jurisdictional bar under Section 6(2)(b) does not apply to these years as the State had not initiated any proceedings for this period.
- It ruled that the Central authority was at full liberty to proceed with the adjudication for these years on merits and in accordance with the law.
Key Takeaways
- Jurisdictional Bar is Period-Specific: The prohibition on parallel proceedings under Section 6(2)(b) is not absolute for a multi-year notice. It applies only to the specific tax periods and subject matter for which another authority has already initiated action.
- No Automatic Quashing: Courts may refrain from quashing a multi-year notice outright. Instead, they can direct the adjudicating authority to first determine its own jurisdiction for the contested periods based on documentary evidence of prior proceedings.
- Fragmented Adjudication is Permissible: It is legally permissible for the Central authority to proceed with adjudication for certain years covered in its notice while dropping the proceedings for other years that are barred by Section 6(2)(b).
- Clarity on “Same Subject-Matter”: This case clarifies that “same subject-matter” must be evaluated on a year-by-year basis. The initiation of a proceeding for one year does not grant the taxpayer immunity from investigation by the other authority for a different year.
HIGH COURT OF BOMBAY
Ravi Steel Industries
v.
Union of India
M.S. Sonak and Advait M. Sethna, JJ.
WRIT PETITION (L) NO. 28245 OF 2024
OCTOBER 7, 2025
Vipin Kumar Jain, Kartik Dedhia and Rishab Jain for the Petitioner. Ashutosh Mishra, Satyaprakash Sharma, S. D. Deshpande, Harpreet Kaur Sethi and Ms Jyoti Chavan, Additional G.P for the Respondent.
ORDER
1. Heard learned Counsel for the parties.
2. The challenge in this Petition is to the impugned show cause notice dated 06 August 2024, read with the impugned notice dated 04 October 2023 issued by Respondent Nos. 2 and 3, proposing to deny the Petitioner’s credit under the CGST Act. The impugned notices issued by the Central Authorities relate to the period from 2017-2018 to 2022-2023.
3. Mr Jain, learned Counsel for the Petitioner, states that insofar as the years 2017-2018 and 2018-2019 are concerned, the State Authorities had already issued notices to the Petitioner, which ended in the passing of an adjudication order. He pointed out that the Petitioner has appealed this adjudication order, and the appeal is pending. Therefore, relying upon the provisions of Section 6(2)(b) of the CGST Act, Mr Jain submitted that since the State Authorities originally initiated proceedings, the Central Authorities would lack any jurisdiction to assess or adjudicate demands covering the same period. He relies on Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate GST 400 (SC)/2025 SCC OnLine SC 1700] to support this contention.
4. Mr. Sharma learned Counsel for the Respondent Nos. 1 to 4 – Central Authorities, submits that the impugned notices admittedly cover a larger period. He further submitted that the Petitioner never disclosed the facts or details of the State proceedings to the Central Authorities.
5. Without prejudice, Mr Sharma submits that if the Petitioner furnishes the details of the State proceedings for the years 2017-2018 and 2018-2019, there is no reason to presume that such details or explanation will not be considered by the Authority that has issued the impugned notices. He submitted that, admittedly, the earlier proceedings do not cover the period other than the above two years.
6. In these circumstances, Mr Sharma submits that this Petition may not be entertained and the matter may be left for the determination of the Authorities, who will consider all the Petitioner’s contentions in accordance with law and on their own merits.
7. Though, prima facie, the decision in the case of Armour Security (India) Ltd. (supra) supports the Petitioner’s contentions in so far as the years 2017-2018 and 2018-2019 are concerned, still, there can be no dispute that the impugned notices cover a larger period, which cannot be said to be entirely covered by the State proceedings.
8. Even Mr Jain, learned Counsel for the Petitioner, very fairly stated that the Petitioner is not averse to the adjudication commenced under the impugned notices in so far as the uncovered years are concerned. However, he maintained that any re-adjudication regarding the covered years would be ex facie without jurisdiction.
9. As noted earlier, it would be open to the Petitioner to furnish full details along with copies of the orders made by the State Authorities in relation to the years 2017-2018 and 20182019. The Petitioner can also provide full details about the pending appeals. At least at this stage, we have no reason to believe that these materials will not be considered by the Central Authorities in the context of the Petitioner’s contention, based on the decision of the Hon’ble Supreme Court in the case of Armour Security (India) Ltd. (supra). In any event, we direct that the Central Authorities consider all such Petitioner’s contentions in regard to these two years in accordance with law and on their own merits.
10. Insofar as the balance of two years is concerned, it is accepted that the jurisdictional bar now pleaded would not apply, and Central Authorities would be at liberty to dispose of the impugned notices relating to the above two years without any impediment, though on its own merits and in accordance with law.
11. For all the above reasons and by issuing the above directions, we dispose of this Petition by not interfering in the impugned notices but by giving the Petitioner liberty to raise all the contentions after providing all the details before the Central Authorities in relation to the years 2017-2018 and 2018-2019.
12. As directed earlier, if such contentions are raised after providing all details, we expect the Central Authorities to consider them in accordance with the law and on their own merits.
13. This Petition is disposed of in the above terms without any costs order.
14. All concerned are to act on an authenticated copy of this order.