Vardhman Ispat Udhyog Vs Adjudicating Authority Cum Deputy Commissioner (Himachal Pradesh High Court)
The petitioner filed a writ petition seeking quashing of the show cause notice dated 11.03.2025 issued by the Deputy Commissioner, Central Goods & Services Tax Division, Dharamshala, along with communications dated 22.07.2024 and 13.02.2025, contending that they were arbitrary, illegal, and without jurisdiction.
The High Court noted that the issue was no longer res integra in view of the Supreme Court judgment in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr., reported in AIR 2025 SC 3854 & (2025) SCC Online 1700, which laid down binding conclusions and guidelines regarding the meaning of “initiation of proceedings,” the “same subject matter,” and the interrelationship between Central and State GST authorities under Section 6(2)(b) of the CGST Act and equivalent State enactments.
The Court reproduced the Supreme Court’s conclusions, including that Section 6(2)(b) bars initiation of proceedings on the same subject matter; formal adjudicatory proceedings commence with issuance of a show cause notice; summons, searches, seizures, and similar investigative actions do not amount to initiation of proceedings; where two proceedings seek to assess or recover an identical or partially overlapping tax liability arising from the same contravention, the statutory bar is attracted; and any show cause notice issued in respect of a liability already covered by an existing show cause notice is liable to be quashed. The Supreme Court had also issued guidelines requiring coordination between Central and State tax authorities, requiring the assessee to cooperate and inform authorities of overlapping inquiries, and providing that where authorities are unable to decide which should continue, the authority first initiating the inquiry or investigation would proceed. The guidelines further state that where a show cause notice has been issued, the authority issuing the show cause notice should continue the proceedings and other authorities should act in accordance with those directions.
