Parallel GST Proceedings Cannot Continue as Section 6(2)(b) Bars Duplicate Adjudication

Saraswati Spinning And Weaving Mills Vs State of Himachal Pradesh (Himachal Pradesh High Court)

The petitioner challenged DRC-01A and DRC-01 notices issued by the State GST authorities for the financial year 2019-20 concerning denial of Input Tax Credit (ITC) under Section 16(2)(c) of the CGST/HGST Acts. The petitioner initially sought quashing of the notices and challenged the validity of Section 16(2)(c), but during the hearing chose not to press the constitutional challenge, reserving liberty to raise it separately in future.

The petitioner contended that detailed replies and supporting documents had already been submitted in response to the notices, claiming entitlement to ITC, but the authorities proceeded further without properly considering those submissions. The petitioner requested a fresh consideration of its objections and documents, particularly regarding whether GST had actually been paid to the supplier, whether the transactions and purchases were genuine and supported by valid documents, whether the transactions took place before cancellation of the supplier’s registration, and whether the petitioner had complied with statutory obligations relating to supplier verification.

The petitioner also pointed out that the CGST authorities had separately issued a show cause notice for the same financial year and subject matter, resulting in parallel proceedings by Central and State GST authorities. It was argued that such parallel proceedings were barred by Section 6(2)(b) of the CGST Act.