Case Law Details
United Bakers Cooperative Society Limited Vs Assistant Commissioner of Central Tax (Telangana High Court)
Telangana High Court – Parallel GST Proceedings & Section 6(2)(b): Granted Petitioner Liberty to File Appeal; Telangana HC Clarifies Scope of “Same Subject Matter” Under Section 6(2)(b); Allows Appeal Route in Parallel Proceedings Dispute
Introduction
Parallel proceedings under GST—especially involving Central and State authorities—have been a major concern for taxpayers. Section 6(2)(b) of the CGST Act seeks to prevent duplication, but its interpretation has often led to litigation.
In a detailed ruling dated 23.04.2026, the Telangana High Court clarified the scope of “same subject matter” and laid down important guidelines on overlapping proceedings. At the same time, the Court granted liberty to the petitioner to pursue the appellate remedy, reinforcing the importance of statutory forums.
Case Background
The dispute arose from:
- Two separate proceedings/orders-in-original dated 22.08.2025 and 13.11.2025
- Both relating to the same tax period
Petitioner’s grievance:
- Alleged parallel proceedings in violation of Section 6(2)(b)
- Claimed that second proceeding overlapped with earlier proceedings
Nature of proceedings:
- First proceeding: Based on difference between GSTR-1 and GSTR-3B (short payment of tax)
- Second proceeding: Based on excess ITC availed (GSTR-3B vs GSTR-2A/9 mismatch)
Key Legal Issue
Whether two GST proceedings can be treated as barred under Section 6(2)(b) when:
- They relate to the same tax period, but
- Arise from different discrepancies or contraventions
Arguments Presented
Petitioner’s Submissions:
- Second show cause notice/proceeding amounts to duplication
- Violates Section 6(2)(b) (bar on parallel proceedings)
- Both proceedings relate to same period and taxpayer
Respondent’s Contentions:
- Proceedings relate to different subject matters
- One deals with tax liability mismatch, other with ITC mismatch
- Hence, no violation of Section 6(2)(b)
Court’s Observations
The Bench comprising Aparesh Kumar Singh and G. M. Mohiuddin made significant observations:
- “Proceedings” under Section 6(2)(b) begin only with issuance of show cause notice
- Summons/investigation do not constitute proceedings
- “Same subject matter” must involve:
- Identical liability, and
- Same contravention on same facts
- Laid down a two-fold test:
1. Whether both proceedings relate to same liability and facts
2. Whether relief/demand sought is identical
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-
- Held that:
- First proceeding: Short payment of tax (GSTR-1 vs GSTR-3B)
- Second proceeding: Excess ITC (GSTR-3B vs GSTR-2A/9)
- Hence, no overlap in subject matter
- Also issued guidelines to avoid duplication between authorities
- Held that:
-
Final Judgment
The writ petition was disposed of with the following directions:
Relief Denied:
- Court did not interfere with proceedings
Liberty Granted:
- Petitioner allowed to file appeal within 2 weeks
Conditions:
- Filing of delay condonation application
- Payment of statutory pre-deposit
Direction to Appellate Authority:
- To consider delay and, if satisfied, decide the matter on merits
Author’s Analysis – Practical Takeaways for Taxpayers
This is a landmark ruling on parallel proceedings:
1. Same Period ≠ Same Subject Matter
Even if proceedings relate to the same tax period, they are valid if based on different issues.
2. Section 6(2)(b) Has Limited Scope
Bar applies only when:
- Same facts
- Same liability
- Same contravention
3. ITC vs Tax Liability Are Distinct
Mismatch in ITC and short payment of tax are treated as separate subject matters.
4. Summons ≠ Proceedings
Only issuance of SCN triggers bar under Section 6(2)(b).
5. Appellate Remedy Still Primary
Even in complex jurisdictional issues, courts direct parties to approach appellate authority.
Conclusion
The decision provides much-needed clarity on the interpretation of Section 6(2)(b) and resolves a major ambiguity surrounding parallel GST proceedings. By distinguishing between different types of tax discrepancies, the Court ensured that enforcement is not unnecessarily restricted while still protecting taxpayers from duplication.
For taxpayers, the key takeaway is clear: Challenge parallel proceedings only when they truly overlap on facts and liability—otherwise, be prepared to defend them separately through proper appellate channels.
FULL TEXT OF THE JUDGMENT/ORDER OF TELANGANA HIGH COURT
Ms. Akruti Goyal, learned counsel appears for petitioner.
Mr. Dominic Fernandes, learned Senior Standing Counsel for Central Board of Indirect Taxes and Customs (CBIC) appears for respondent Nos.1, 2 and 4.
2. Two adjudication orders, Orders-In-Original dated 22.08.2025 and 13.11.2025 covering the same tax period from April, 2021, to March, 2022, have been assailed primarily on the ground of overlapping on the subject matter.
3. On behalf of the petitioner, it has been contended that the first proceeding alleged short payment of tax in GSTR-3B when compared to GSTR-1 and imposition of liability. The second proceeding was initiated on the basis of scrutiny of the returns vide notice in Form GST ASMT- 10 dated 19.06.2025 and the petitioner filed its reply on 26.08.2025. After considering the petitioner’s reply, the first charge relating to discrepancy between GSTR-1 vs. GSTR-3B was not proceeded in the show cause notice dated 15.09.2025 which was confined to excess Input Tax Credit (ITC) claimed on invoices not reflected in GSTR-2A as per GSTR-9.
4. After the show cause notice dated 15.09.2025, opportunity of hearing was given and the Order-In-Original dated 13.11.2025 was passed imposing tax, interest and liability confirming the demand for excess ITC claimed on invoices but not in GSTR-2A. The challenge to these proceedings has been laid as noted above on the ground of overlap on the subject matter.
5. In this regard, attention has been drawn by learned counsel for CBIC to the decision of the Apex Court in Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate {[2025] 177 com 478 (SC)}. Conclusive portion thereof reads as under:
“96. We summarize our final conclusion as under:-
i. Clause (b) of sub-section (2) of Section 6 of the CGST Act and the equivalent State enactments bars the “initiation of any proceedings” on the “same subject matter”.
ii. Any action arising from the audit of accounts or detailed scrutiny of returns must be initiated by the tax administration to which the taxpayer is assigned.
iii. Intelligence based enforcement action can be initiated by any one of the Central or the State tax administrations despite the taxpayer having been assigned to the other administration.
iv. Parallel proceedings should not be initiated by other tax administration when one of the tax administrations has already initiated intelligence-based enforcement action.
v. All actions that are initiated as a measure for probing an inquiry or gathering of evidence or information do not constitute “proceedings” within the meaning of Section 6(2)(b) of the CGST Act.
vi. The expression “Initiation of any proceedings” occurring in Section 6(2)(b) refers to the formal commencement of adjudicatory proceedings by way of issuance of a show cause notice, and does not encompass the issuance of summons, or the conduct of any search, or seizure etc.
vii. The expression “subject matter” refers to any tax liability, deficiency, or obligation arising from any particular contravention which the Department seeks to assess or recover.
viii. Where any two proceedings initiated by the Department seek to assess or recover an identical or a partial overlap in the tax liability, deficiency or obligation arising from any particular contravention, the bar of Section 6(2)(b) would be immediately attracted.
ix. Where the proceedings concern distinct infractions, the same would not constitute a “same subject matter” even if the tax liability, deficiency, or obligation is same or similar, and the bar under Section 6(2)(b) would not be attracted.
x. The twofold test for determining whether a subject matter is “same” entails, first, determining if an authority has already proceeded on an identical liability of tax or alleged offence by the assessee on the same facts, and secondly, if the demand or relief sought is identical.
97. We issue the following guidelines to be followed in cases where, after the commencement of an inquiry or investigation by one authority, another inquiry or investigation on the same subject matter is initiated by a different authority.
a. Where a summons or a show cause notice is issued by either the Central or the State tax authority to an assessee, the assessee is, in the first instance, obliged to comply by appearing and furnishing the requisite response, as the case may be. We say, so because, mere issuance of a summons does not enable either the issuing authority or the recipient to ascertain that proceedings have been initiated.
b. Where an assessee becomes aware that the matter being inquired into or investigated is already the subject of an inquiry or investigation by another authority, the assessee shall forthwith inform, in writing, the authority that has initiated the subsequent inquiry or investigation.
c. Upon receipt of such intimation from the assessee, the respective tax authorities shall communicate with each other to verify the veracity of the assessee’s claim. We say, so as this course of action would obviate needless duplication of proceedings and ensure optimal utilization of the Department’s time, effort, and resources, bearing in mind that action initiated by one authority enures to benefit of all.
d. If the claim of the taxable person regarding the overlap of inquiries is found untenable, and the investigations of the two authorities pertain to different “subject matters”, an intimation to this effect, along with the reasons and a specification of the distinct subject matters, shall be immediately conveyed in writing to the taxable person.
e. The taxing authorities are well within their rights to conduct an inquiry or investigation until it is ascertained that both authorities are examining the identical liability to be discharged, the same contravention alleged, or the issuance of a show cause notice. Any show cause notice issued in respect of a liability already covered by an existing show cause notice shall be quashed.
f. However, if the Central or the State tax authority, as the case may be finds that the matter being inquired into or investigated by it is already the subject of inquiry or investigation by another authority, both authorities shall decide inter-se which of them shall continue with the inquiry or investigation. In such a scenario the other authority shall duly forward all material and information relating to its inquiry or investigation into the matter to the authority designated to carry the inquiry or investigation to its logical conclusion. We say, so because, the taxable person except for being afforded the statutory protection from duplication of proceedings, otherwise has no locus to claim which authority should proceed with the inquiry or investigation in a particular matter.
g. However, where the authorities are unable to reach a decision as to which of them shall continue with the inquiry or investigation, then in such circumstances, the authority that first initiated the inquiry or investigation shall be empowered to carry it to its logical conclusion, and the courts in such a case would be competent to pass an order for transferring the inquiry or investigation to that authority.
h. If it is found that the authorities are not complying with these aforementioned guidelines, it shall be open to the taxable person to file a writ petition before the concerned High Court under Article 226 of the Constitution of India.
i. At the same time, taxable persons shall ensure complete cooperation with the authorities. It is incumbent upon them to appear in response to a summons and/or reply to a notice.”
6. However, upon hearing the learned counsel for the parties and taking note of the pleadings, the impugned orders and the relevant materials on record, we are of the opinion that the subject matter of the second show cause notice does not overlap the first proceedings, though relating to the same tax period. The first charge of short payment of tax on a comparison to the liability declared in GSTR-1 and tax paid in GSTR-3B were not part of the show cause notice dated 15.09.2025 taking into note the reply of the petitioner to ASMT-10 notice. That could have been the subject matter overlapping the first proceedings. However, since the second proceeding was only on account of excess availment of ITC on comparison of GSTR 3B/GSTR 9 returns with GSTR 2A for the relevant financial year, in view of the ratio rendered in the case of Armour Security (India) Ltd. (supra), the second proceedings does not overlap on the first proceedings.
7. Therefore, after some arguments, learned counsel for the petitioner seeks permission to approach the appellate authority against the Orders-In-Original dated 22.08.2025 and 13.11.2025.
8. Learned counsel for the respondents submits that the petitioner ought to have availed the appellate remedy taking all grounds of law and on facts and merits.
9. However, since the petitioner seeks to avail alternative remedy, we do not wish to make any comment on the merits of the case of the parties.
10. The petitioner may approach the appellate authority within a period of two (2) weeks with a delay condonation application and statutory pre-deposit. It is open for the petitioner to take all such grounds in law and on facts in the appeal. Needless to say, the appellate authority would consider the question of delay and if he is satisfied with the reasons explained in the delay condonation application, he shall decide the case on merits.
The instant Writ Petition is disposed of with the aforesaid liberty. There shall be no order as to costs.
Miscellaneous applications, if any pending, shall stand closed.
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