❖ Introduction
India’s adoption of the dual GST model, with both the Centre and States levying taxes, has led to the emergence of parallel tax investigations. The Goods and Services Tax (GST) regime was envisioned as a unified tax system aimed at simplifying the indirect tax structure and promoting cooperative federalism. However, the concurrent jurisdiction of both Central and State tax authorities under the GST framework has, at times, led to overlapping proceedings such as investigations, audits, summons, and adjudication proceedings often for the same transaction or issue. This phenomenon, often referred to as “parallel proceedings,” raises several legal, administrative, and constitutional concerns—particularly with respect to double jeopardy, taxpayer harassment, and the risk of contradictory outcomes.
This article delves into the evolving landscape of parallel proceedings under GST, examining key judicial pronouncements, assessing the extent of powers exercised by the authorities, and exploring the options and remedies available to taxpayers when faced with such overlapping actions.
❖ What is “Parallel proceedings”?
Parallel proceedings under GST occur when two or more separate legal actions — such as audits, investigations, summons, show cause notices, or adjudications — are initiated simultaneously or concurrently on the same taxpayer for the same period or issue. These actions may be initiated by different wings of the department, such as:
- Audit wing under Section 65.
- Anti-Evasion or Intelligence wing under Section 67.
- Range or Jurisdictional Officer issuing demand notices under Sections 73 or 74.
Although, there are specific sections for initiation of these proceedings and power and jurisdiction of such proceedings have also been precisely prescribed under the relevant provisions, such provisions are excessively misused by opening multiple proceedings by different authorities in the same matter.
❖ Legal Framework Governing Parallel Proceedings under GST:
To prevent undue scrutiny of a single transaction by both tax authorities, Section 6 of the Central
Goods and Services Tax Act (CGST Act) restricts Central and State Tax officers.
Section 6 of the CGST Act, 2017:
This section provides for cross-empowerment of officers from both the Central and State Governments to act on behalf of each other. Specifically: Sub-section (2)(b) of Section 6 states that where a proper officer under the CGST Act has initiated proceedings, no proceedings shall be initiated by the officers under the SGST Act on the same subject matter.
Similar provisions are also contained in the SGST Acts of other States, mirroring Section 6(2)(b) to prevent parallel proceedings on the same subject matter once initiated under the CGST Act.
In case of proceedings initiated by investigation wing, it was clarified by the CBIC (formerly CBEC) through its Circular dated 05.10.2018 (F. No. CBEC/20/43/01/2017-GST) that if an officer of the Central tax authority initiates intelligence based enforcement action against a taxpayer administratively assigned to State tax authority, the officers of Central tax authority would not transfer the said case to its State tax counterpart and would themselves take the case to its logical conclusions. Similar position would remain in case of intelligence-based enforcement action initiated by officers of State tax authorities against a taxpayer administratively assigned to the Central tax authority.
Section 6(2)(b) of the GST law is meant to avoid situations where a taxpayer is troubled by two different authorities (like the Centre and the State) for the same issue. It’s based on a legal principle called “Comity of Courts,” which basically means that courts and authorities should respect each other’s decisions and not interfere if someone else is already handling a matter.
This idea also connects with Article 20(2) of the Indian Constitution, which protects people from being punished more than once for the same offence—known as double jeopardy. While this is mostly used in criminal cases, the same idea applies here too: if one authority is already looking into a case, another shouldn’t start a separate one for the same issue.
Additionally, the doctrine of res judicata — a foundational principle of civil law — also resonates here. Once a dispute or inquiry is addressed and adjudicated by a competent forum, it should not be reopened or duplicated, ensuring finality and certainty in legal proceedings.
So, Section 6(2)(b) is not just a rule to make things easier—it reflects deeper legal principles to ensure fairness, consistency, and avoid harassment. It helps save time, effort, and prevents confusion by making sure a taxpayer doesn’t face multiple investigations for the same transaction.
Despite the statutory intent under Section 6(2)(b) to prevent duplicative action, in practice, multiple authorities have initiated proceedings independently, leading to litigation and confusion.
❖ Judicial Approach to Parallel Proceedings under GST
Indian courts have consistently viewed parallel proceedings with skepticism, especially when they overlap on identical issues. The logic is simple: Taxpayers should not be subjected to repetitive scrutiny and unnecessary harassment for the same facts under different sections. The judiciary, through various rulings, have played a pivotal role in clarifying the scope and limitations of parallel proceedings, particularly in light of Section 6(2)(b) of the CGST Act, 2017.
The following key decisions illustrate the judicial stance on the issue:
Judgements in favour of the Assessee:
1. Subhash Agarwalla vs State of Assam: (Decided on 12-2-2024)
The High Court of Gauhati held that where for same period orders were issued under Section 73 by authorities under CGST Act and SGST Act for same allegation, two parallel proceedings in respect of same period would not be permissible, order passed by authority under CGST Act was to remain suspended till returnable date.
The Orissa High Court quashed proceedings initiated by CGST subject matter of which was scrutiny under section 61 of CGST Act, for relevant periods, whereas State authorities had already conducted audit and final audit report was disclosed, show cause notice issued by Central revenue was after commencement of audit and subject matter of both proceeding were same, impugned order was to be set aside.
when SGST had already undertaken investigation on the same issue. It declared that Section 6(2)(b) bars parallel jurisdiction and found the second proceeding to be non-est in law, reaffirming protection against duplicity of action.
3. Al-Tech Engineering and Construction Pvt. Ltd. v. Union of India, (Decided on 20-03-2025)
The Karnataka High Court held that where CGST and SGST authority initiated parallel proceeding against assessee and passed order under section 73 in respect of same year by putting forth very same contentions against assessee, same was impermissible thus, such orders were to be quashed.
4. Ramesh Agency vs Assistant Commissioner (ST), Madurai (Decided on 25-04-2024)
The High Court of Judicature at Madras held that where assessee was under audit under section 65 while parallel proceedings was also initiated under section 73 for same assessment year. The assessee was unaware of said proceedings which culminated in impugned order and substantial portion of tax had been recovered from electronic credit ledger of assessee. It was held that impugned order was to be set aside and matter was to be remitted to pass fresh orders on merits.
5. R. P. Buildcon Private Limited v. Superintendent, CGST & Central Excise (Decided on 30-09-22)
The High Court at Calcutta held that where audit proceedings under Section 65 have already commenced, said proceedings should be taken to logical end and proceedings initiated by Anti Evasion and Range Office for very same period should not be proceeded with any further.
Judgements in favour of Revenue:
6. Sapphire Foods Indi Ltd. v. Union of India, (Decided on 25-04-2024)
The High Court of Punjab & Haryana held that parallel proceedings by different authorities for GST matters were permissible when they concerned distinct aspects: Commercial Tax Officer’s jurisdiction for general GST payment issues and DGGI’s authority for TRAN-1 verification could coexist without conflict.
7. Amit Gupta vs Union of India (Decided on 04-09-2023)
Proceedings with regard to availment of ineligible input tax credit (ITC) were commenced by Jurisdictional Commissionerate – Subsequently, DGGI conducted investigation relating to diversion of agricultural grade urea and its sale as technical grade urea and reflecting purchase by way of fake invoices. The High Court of Delhi held that object of Section 6(2)(b) of CGST Act is to restrict parallel proceedings in respect of same subject matter and not to restrict consolidation of proceedings under a single Authority.
8. G. K. Trading Company v. Union of India & Others, 2021-VIL-12-ALH
The Allahabad High Court held that no proceeding was being initiated by a proper officer against petitioner on same subject-matter referable to Section 6(2)(b) of Uttar Pradesh Goods and Services Tax Act, 2017 but merely an inquiry by a proper officer under Section 70 of Central Goods and Services Tax Act, 2017 being initiated – Proceedings not barred. It was concluded that ‘inquiry’ under Section 70 cannot be intermixed with ‘proceedings’ under Section 6(2)(b).
The collective judicial wisdom from various High Courts across India unequivocally confirms that Section 6(2)(b) is a mandatory provision designed to prevent administrative overreach and duplicative investigations. These decisions reinforce that only one authority may proceed on a given issue, ensuring that taxpayers are protected from multiple proceedings, in line with the doctrines of comity, within the GST regime.
The following table provides certain practical scenarios as to elucidate what qualifies as parallel proceedings and what does not, in accordance with Section 6(2)(b) of the GST Act:
| S.N. | Matter | Permissibility | Remarks |
| 1 | Same issue for the same year raised by both Central and State authorities | Not Allowed | Restricted under Section 6(2)(b). |
| 2 | Different issue for the same year, or same issue for different years raised by both authorities | Allowed | Different subject or year, not restricted. |
| 3 | Audit under Section 65 not concluded, but investigation initiated by another authority for the same year | Not Allowed | Audit must first come to a logical end, only then proceedings by other department can be issued for different issues. |
| 3 | Audit under Section 65 concluded, but investigation initiated by another authority for the same year for different issue | Allowed | Different issue, so permissible |
| 4 | Case already pending, but an inquiry is initiated by another authority | Allowed | Inquiry is not considered a formal proceeding. |
❖ Conclusion
Courts have consistently held that parallel proceedings by both CGST and SGST authorities on the same subject matter are impermissible, as they contravene the principles of natural justice and impose an undue burden on taxpayers. The GST regime, while transformative, continues to grapple with challenges arising from jurisdictional overlaps and excessive compliance burdens.
Section 6 of the CGST Act stands as a critical safeguard, aiming to prevent parallel proceedings and uphold constitutional principles such as protection against double jeopardy and the doctrine of res judicata. Judicial scrutiny has consistently emphasized the need for administrative discipline and coordination between Central and State authorities.
To ensure a fair and efficient tax system, it is imperative that verification proceedings like scrutiny and audits are exercised with restraint. Harmonization and legal clarity, guided by both legislative intent and judicial pronouncements, are essential for reducing taxpayer hardship and reinforcing the integrity of India’s GST framework.
Moving forward, proactive intervention from bodies like the CBIC will be crucial to resolve existing ambiguities and foster a unified and taxpayer-friendly compliance environment.
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Article is jointly authored by CA Rohit Surana & CA Sunayna Banthia
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