State GST authority cannot pass a parallel tax order if Central GST

State GST authority cannot pass a parallel tax order if Central GST proceedings are already pending.

Issue

Whether a State GST Authority has the legal jurisdiction under Section 6 of the CGST/DGST Act to issue a Show Cause Notice and pass an adjudication order for a tax period when a Central GST Authority has already initiated parallel proceedings covering overlapping subject matters for the exact same period.

Facts

The State GST Action: The petitioner challenged an adjudication order dated December 18, 2025, passed by the State GST Authority (Respondent No. 2) under Section 73, which arose from a Show Cause Notice (SCN) dated July 2, 2025.
Prior Central GST Action: Prior to the State’s action, the Central GST Authority (Respondent No. 4) had already issued an SCN dated June 28, 2025, under Section 74 covering 17 entities for the identical tax periods of 2020-21, 2021-22, and 2022-23.
Undisputed Overlap: There was an undisputed structural overlap between the two proceedings, with 9 corporate entities appearing in both the Central and State SCNs.
Statutory Objection Raised: On July 22, 2025, the petitioner formally filed an objection under Section 6 of the Act before the State GST Authority, citing the pre-existing Central GST SCN and requesting them to drop the parallel proceedings.
Failure to Address Objection: All relevant SCNs and responses were uploaded onto the shared GST portal accessible to both departments. Despite having access to this data, the State GST Authority completely ignored the Section 6 jurisdictional objection and rushed to pass the final adverse tax order.

Decision

The Court ruled entirely in favor of the assessee and allowed the writ petition.
It held that since the material facts regarding the prior Central GST SCN and the 9 overlapping entities were available on the shared GST portal, the State GST Authority was duty-bound under Section 6 to verify the system and actively avoid parallel adjudication.
It ruled that the impugned order passed by the State GST Authority under Section 73 completely lacked jurisdiction because the Central authority had already seized jurisdiction over the matter.
Consequently, the Court quashed the State GST adjudication order and directed that the State’s SCN dated July 2, 2025, be kept in absolute abeyance until the Central GST Authority completes its final adjudication.

Key Takeaways

Strict Bar on Parallel Proceedings: Section 6 of the GST Act establishes a clear jurisdictional boundary. Once either the Central or State authority initiates investigative or enforcement actions (like issuing an SCN) on a subject matter, the other authority is statutorily prohibited from launching parallel proceedings on the same issue.
Mandatory Portal Verification: Tax officers cannot claim ignorance of parallel proceedings carried out by their counterparts. Since the GST portal serves as a unified repository accessible to both Central and State wings, officers are legally obligated to check the portal and decline jurisdiction if a cross-departmental overlap exists.
Priority of First Notice: The authority that issues its Show Cause Notice first retains exclusive jurisdiction over the tax dispute. Any subsequent orders passed by the trailing authority on overlapping issues are legally flawed, bad in law, and liable to be quashed by writ courts.

HIGH COURT OF DELHI

Maa Jagdambe Engineering Works

Commissioner of Trade & Taxes^*

NITIN WASUDEO SAMBRE and Ajay Digpaul, JJ.

W.P. (C) No. 3635 of 2026
CM APPL. No. 17745 of 2026

APRIL 2, 2026

Anurag Kishore, AOR, Ms. Ritika Srivastava and Lakhan Kr. Mishra, Advs. for the Petitioner. Vishal Chadha, Senior Standing Counsel, Sumit K. Batra and Ms. Priyanka Jindal, Advs. for the Respondent.

JUDGMENT

Nitin Wasudeo Sambre, J.- The challenge is to the order dated 18^th December, 2025, passed by respondent no. 2- State GST Authority, which is based on the Demand-cum-Show Cause Notice dated 2^nd July, 2025.

2. Out of the total 17 entities in respect of which respondent no. 4-CGST Authority issued the Show Cause Notice dated 28^th June, 2025; respondent no. 2 proceeded to assess the tax liability of the petitioner in respect of 9 entities, which overlapped with the aforesaid Show Cause Notice.

3. Since the Show Cause Notice issued by respondent no. 4 -CGST Authority was prior in point of time, i.e., dated 28^th June, 2025, as compared to the Show Cause Notice issued by respondent no. 2 – State GST Authority dated 2^nd July, 2025, the petitioner objected to the continuation of proceedings against him in terms of the statutory mandate under Section 6 of the Central Goods and Services Tax Act, 2017 (“CGST Act”).

4. Instead of dealing with the same, the impugned order came to be passed on 18^th December, 2025, which is challenged before us.

5. Amongst other, primary contention raised by the petitioner is that once the respondent no.4- CGST Authority was seized of the matter in view of the Show Cause Notice dated 28^th June, 2025 and the petitioner had objected to the continuation of proceedings before respondent no. 2, in light of the statutory embargo under Section 6 of the CGST Act, respondent no. 2 ought not to have proceeded to pass the impugned order.

6. He would further submit that the impugned order is without jurisdiction, as proceedings under Section 74 of the CGST Act have already been initiated by respondent no. 4- CGST Authority for the financial year 2020-2021, 2021-2022 and 2022-2023.

7. Learned counsel for respondent no. 4- CGST Authority states that the proceedings initiated by the CGST Authority shall hold the field, particularly, as the Show Cause Notice dated 28^th June, 2025 issued by respondent no. 4 is prior in point of time. He would claim that it was incumbent upon the State Authority to keep their hands off in the matter in question.

8. While countering both these submissions, learned counsel for respondent no.2 states that the law is quite clear on the aforesaid issue. According to him, even if the fact that the petitioner failed to bring the Show Cause Notice and other details issued by respondent no. 4 – CGST Authority to the notice of respondent no. 2 is ignored, the authority can still proceed against the petitioner to the extent of the entities covered under the Show Cause Notice. Further, respondent no. 4 – CGST Authority can, in its proceedings, ignore those entities in respect of which the State Authority has already carried out assessment and adjudication. As such, he has sought dismissal of the present proceedings on the ground that an alternate remedy of appeal is also available to the petitioner.

9. Having considered the rival submissions, it is not in dispute that in the Show Cause Notice dated 28^th June, 2025 issued by respondent no.4, there are in all nine entities which are overlapping. Admittedly the said notice was issued prior to the Show Cause Notice issued by respondent no.2 i.e. on 2^nd July, 2025.

10. The said fact was very much brought to the notice of respondent no.2 by the petitioner through a communication dated 22^nd July, 2025, which is placed on record at page nos.174 and 175 as Annexure P-4. This objection has not been dealt with by respondent no.2 in the impugned order.

11. We hardly see any counter on the part of the respondent no.2 to the same, but for the very objection that Show Cause Notice issued by respondent no.4- CGST Authority was not made available by the petitioner to them.

12. It is not a fact in dispute that entire documents qua the Show Cause Notice and reply are very much available on the GST portal, to which, both the respondents i.e., respondent no.2 and respondent no.4 have access. In such an eventuality, in our opinion, respondent no. 2, having regard to the statutory mandate of Section 6 of the CGST Act, is duty-bound to examine the said portal so as to ascertain the material available on record. Even otherwise, the petitioner had brought to the notice of respondent no. 2 the details of the Show Cause Notice dated 28^th June, 2025 issued by respondent no. 4 – CGST Authority.

13. The fact remains that an overlap of entities covered under the Show Cause Notice issued by respondent no. 4 – CGST Authority is borne out from the record and is not in dispute.

14. In the aforesaid view of the matter, we deem it appropriate to quash and set aside the impugned order dated 18^th December, 2025.

15. As far as the Show Cause Notice dated 2^nd July, 2025 of respondent no.2 issued under Section 73 of the CGST Act is concerned, same is directed to be kept in abeyance.

16. We further direct respondent no.4 – CGST Authority to complete the adjudication against the petitioner within a period of four months from today and copy of the same be made available to respondent no.2, so also to the petitioner.

17. Needless to clarify, once the order of adjudication is made available to respondent no.2, it shall be open for respondent no.2 to take a call qua the Show Cause Notice dated 2^nd July, 2025 issued under Section 73 of the CGST Act having regard to the statutory mandate of Section 6 of the CGST Act.

18. The petition stands allowed in above terms.

19. Pending application, if any, also stands disposed of.

20. A copy of this Judgment be uploaded on the website of this Court.