Same Year and Same ITC Alone Do Not Bar a Second GST Proceeding: Delhi High Court

The Delhi High Court has held that a State GST notice and a central GST notice are not automatically on the same subject matter under Section 6(2)(b) merely because they cover the same financial year and the same input tax credit dispute.

A taxpayer who had already faced a State GST show cause notice for 2020-21, which the State later dropped, was then served with a central show cause notice covering several financial years and ending in a far larger demand. It asked the Delhi High Court to quash the central order, arguing that Section 6(2)(b) of the CGST Act barred it.

Section 6(2)(b) says that "where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter." The Act is on the Government of India's India Code repository at https://www.indiacode.nic.in/bitstream/123456789/11229/1/the_central_goods_and_services_tax_act,_2017.pdf

The Court refused to interfere. The bar is real, it held, but two proceedings do not become the "same subject matter" merely because they touch the same financial year and the same input tax credit. The periods, the allegations, the transactions and the computations have to be compared. Here the State notice covered one year and the central notice several, so identity was not apparent. The Court left the point open for the Appellate Authority to decide.

What this means for you: a parallel-proceedings objection is worth taking, but take it in the appeal, with the two notices compared line by line, not as a bare assertion in a writ petition.

Topics:GSTSection 6(2)(b)parallel proceedingscross empowermentshow cause noticeState GSTcentral GSTinput tax creditDelhi High CourtappealChennaiTamil Nadu

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