No, the Hon’ble Himachal Pradesh High Court in Shivalik International v. Joint Commissioner of State Tax & Ors. [2025 TAXONATION 1401 (HIMACHAL PRADESH)] held that once proceedings under Section 67 of the CGST/HPGST Act were already initiated by the Central GST Commissioner, the State GST authorities could not initiate parallel proceedings for the same cause and period. The Court clarified that only the initially empowered authority should proceed, while the other may assist but cannot independently prosecute the case.
In this case, the petitioner challenged the jurisdiction of the State GST authorities to issue summons under Section 70 and initiate action under Section 74(5), when similar proceedings under Section 67 had already been initiated by the Central GST authorities. Despite the prior initiation of action by the Central Commissioner, the State authorities proceeded to conduct raids, sealed the premises, and blocked ITC—effectively duplicating proceedings for the same set of facts and financial year.
The High Court found that such parallel proceedings violate the scheme of the CGST Act, which envisages coordination between Central and State authorities, not simultaneous duplication. It held that once proceedings are initiated by one authority, jurisdiction vests with that authority alone, and the other can only assist, not act independently. Accordingly, the Court directed that only the Central GST Commissioner would continue the proceedings, while the State GST officers may assist but not independently initiate or pursue action. The Court also allowed the petitioner to seek de-sealing of premises before the competent officer and directed the State to hand over charge to the Central authority to enable further lawful action.
Author’s Comments
Section 6(2)(b) of the CGST Act aims to prevent duplicative adjudication and protect taxpayers from facing parallel proceedings for the same subject matter. However, the bar is not absolute. Its applicability hinges on whether both proceedings are based on the same cause of action, facts, and period.
In the author’s considered view, this decision—though beneficial for the taxpayer—is based on an overbroad reading of Section 6(2)(b). In the present case, Central GST authorities were conducting an investigation under Section 67, while the State GST authorities had already concluded investigation and issued DRC-01A under Section 74, presumably based on independent findings. These are two different stages of enforcement, and unless both proceedings stem from identical allegations or contraventions, they may not necessarily violate the bar under Section 6(2)(b).
Importantly, Section 6(2)(b) bars initiation of fresh proceedings by one authority only when the other has already initiated proceedings on the same subject matter. Therefore:
In this context, the author believes that the two proceedings—inspection by CGST and issuance of DRC-01A post proceedings u/s 67 by SGST—were not inherently duplicative, and hence Section 6(2)(b) was not strictly violated. The more appropriate application of this provision would have been to bar the CGST authorities from issuing a second SCN on the same cause already addressed by the SGST department—not from continuing an independent investigation under Section 67.
Unfortunately, this defensive nuance appears to have been missed by the Department’s counsel, resulting in an adverse ruling due to premature challenge.
GST Case Law Shivalik International v. Joint Commissioner of State Tax & Ors.
Citation-2025 TAXONATION 1401 (HIMACHAL PRADESH)
CA Ritesh Arora
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