Saraswati Spinning and Weaving Mills Vs State of H.P. & others (Himachal Pradesh High Court)
The petitioner filed a writ petition under Article 226 of the Constitution seeking quashing of multiple GST notices and orders, including DRC-01 show cause notices for the financial years 2019-20 and 2020-21 and an order dated 3.2.2025 communicated through DRC-07 dated 5.2.2025. The principal issue concerned the prohibition under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 against parallel adjudicatory proceedings on the same subject matter by Central and State GST authorities. The petitioner contended that both authorities had initiated overlapping proceedings on the same subject matter, which was impermissible. The respondents submitted that they would abide by Section 6(2)(b) and the binding principles laid down by the Supreme Court in Armour Security (India) Ltd. v. Commissioner, CGST, AIR 2025 SC 3854.
The High Court noted that the legal position stood clarified by the Supreme Court in Armour Security, particularly paragraphs 96 and 97, which define “initiation of proceedings” as the formal commencement of adjudication by issuance of a show cause notice, and clarify that summons, search, or seizure do not amount to initiation of proceedings. The Supreme Court also held that parallel proceedings on the same subject matter are barred once one authority has initiated proceedings first in point of time, and laid down guidelines requiring inter-departmental coordination to prevent duplication.
