1. Why this issue matters now
GST was supposed to give us “one nation, one tax”. In daily practice, taxpayers are discovering something else: one nation, two sets of officers, and sometimes three sets of proceedings for the same period.
In Karnataka, many centrally‑administered GSTINs are now facing inspections, DRC‑01A and DRC‑01 from the State Enforcement wing, followed by adjudication orders from State Audit, even though the registration and returns are under Central jurisdiction. At the same time, Central officers wake up later, issue their own audit notices, and threaten to “hand over to DGGI” if the taxpayer invokes section 6(2)(b).
This is not what the law prescribes. Section 6(2)(b) of the CGST Act is very clear: once one authority (Central or State) has initiated proceedings on a subject‑matter, the other shall not start proceedings on the same subject‑matter for the same period. Courts have repeatedly stopped “dual” or “parallel” actions. Yet, in the field, jurisdiction is still treated like a flexible concept.
The case study below is from a Karnataka‑based scrap dealer. It shows how State officers are crossing lines on centrally‑administered taxpayers, and what the law actually says about it.
2. The example: Central GSTIN pulled into full State adjudication
Facts in brief:
The client is a registered dealer under Central jurisdiction (CGST/central admin).
Despite this, a State CCT/JDN order dated 31.07.2023 and an assignment by JCCT (Enforcement – State) set the machinery in motion.
ACCT (Enforcement – State) conducted inspection, invoked section 67, and issued DRC‑01A and DRC‑01 covering financial years 2022‑23 to 2025‑26.
The Enforcement officer then sent his report and DRC‑01 summary to DCCT (Audit‑1 – State).
DCCT (Audit‑1 – State) passed adjudication orders for F.Y. 2024‑25 and 2025‑26 based on that report, even though the taxpayer’s registration is under Central jurisdiction.
For F.Y. 2023‑24, DRC‑01 has been issued by State Enforcement; order is still pending with State Audit.
In effect, State has taken over full adjudication for four years against a Central‑administered GSTIN.
The core question: Is this legally correct?
In my view, and in the view of several High Courts, the answer is no, unless there is a specific cross‑empowerment notification and clear administrative assignment that the taxpayer has been handed to State for those proceedings. In absence of that, State can assist (inspection, intelligence), but cannot run independent 73/74/74A adjudication for a Central taxpayer.
3. Jurisdiction architecture under GST – who does what
3.1 Parallel structure: CGST and SGST
Under the dual GST model, every supply within a State attracts CGST + SGST. There are:
Central officers (CGST Commissionerates), and
State officers (SGST / Commercial Taxes).
Section 6 of the CGST Act deals with cross‑empowerment. Section 6(1) allows officers of Central tax and State tax to act as “proper officer” for both laws, subject to notifications and conditions.
However, section 6(2)(b) adds an important safety valve:
“Where a proper officer under the CGST Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under the SGST Act on the same subject matter and vice versa.”
This is the statutory expression of the “one issue, one authority” principle.
3.2 Administrative assignment: State vs Centre
The GST Council and various circulars have broadly divided taxpayers between Centre and State (e.g., 90:10, turnover‑based, etc.). For a given GSTIN, one administration is marked as “primary jurisdiction” on the portal. That authority is responsible for:
routine assessments,
scrutiny,
audit, and
adjudication under sections 73, 74, 74A (now).
The “other” side can still:
share intelligence,
assist in inspection/search under section 67, and
coordinate on enforcement.
But it cannot, on its own, start and complete an independent adjudication on the same demand for the same period.
4. What High Courts and Supreme Court are saying
Recent decisions across the country (and commentary on them) are quite consistent.
4.1 Orissa & Calcutta line – dual proceedings barred
Orissa High Court quashed a CGST demand where SGST had already conducted audit and passed an order on the same transactions, holding the Central proceedings barred by section 6(2)(b).
Calcutta High Court stayed coercive steps in a case where CGST and SGST both initiated proceedings for the same period, emphasising that dual audit/demand is contrary to the scheme of cross‑empowerment.
The common thread: if one side (State or Centre) has already seized the subject‑matter and gone ahead, the other must stand down.
4.2 Karnataka and Himachal Pradesh trends
Karnataka High Court (e.g., in Instakart‑type matters and parallel proceedings articles) has insisted that proper officer and jurisdiction are not empty words. If a taxpayer is assigned to one authority, others cannot issue overlapping SCNs and orders without clear statutory basis.
Himachal Pradesh High Court, while dealing with NGTP and ITC denial, has criticised the practice of treating upstream tags as automatic grounds for separate, repeated demands against the same buyer, again highlighting the need to respect procedural protections.
4.3 Supreme Court – fairness and non‑harassment
While the Supreme Court has not yet delivered a focused 6(2)(b) judgment in GST, it has repeatedly held in tax matters that:
power must be exercised within jurisdiction,
taxpayers cannot be harassed by multiple overlapping proceedings, and
procedural fairness is not an empty ritual.
These principles are directly applicable to GST jurisdiction disputes.
5. Applying this law to your client’s case
My client’s case raises three layers:
Administrative jurisdiction – GSTIN is Central‑administered.
Substantive proceedings – State Enforcement and State Audit have issued DRC‑01 and passed orders for 2024‑25 and 2025‑26, and are mid‑way for 2023‑24.
Potential Central action – Central authorities may later want to audit and demand for the same years.
In a legally correct framework:
If Centre is the primary jurisdiction, then only Central proper officers should issue 73/74/74A SCNs and adjudicate demands for that taxpayer. State can assist but should not pass independent orders against that GSTIN, unless there is a specific order placing that taxpayer under State control for that subject.
If State has already done a full audit and adjudication (even though technically it should not have), any further Central proceedings on the same issue and period are barred under section 6(2)(b).
My client has two lines of challenge:
Challenge State’s jurisdiction to adjudicate a centrally‑administered GSTIN.
In parallel, resist any future Central parallel proceedings as “dual” under section 6(2)(b) using Orissa/Calcutta/Karnataka case law.
6. What is “parallel / dual proceedings” under section 6(2)(b)?
In practice, dual proceedings show up in three patterns:
Same period, same issue, two SCNs – e.g., SGST issues SCN for 2022‑23 ITC mismatch and CGST later issues another SCN for the same mismatch. This is classic 6(2)(b) violation.
Audit by one, demand by another – e.g., State conducts audit, raises objections, but instead of concluding itself or coordinating, Central issues its own demand on the same audit findings. Courts have restrained such overlaps.
Enforcement vs jurisdictional officer – e.g., Enforcement (State) runs a full 74A case and then hands a “ready‑to‑sign” proposal to State Audit OR Central Audit, who simply signs off. Here the primary question is: was that officer ever the “proper officer” for that GSTIN and subject‑matter?
Section 6(2)(b) is meant to prevent exactly this sort of ping‑pong.
7. Can State adjudicate a Central taxpayer and vice‑versa?
In principle:
Yes, but only through clear cross‑empowerment and assignment orders – not just internal JDNs or administrative memos.
The officer must be designated as the “proper officer” for that taxpayer and that function (audit/adjudication) under the relevant notification.
In practice (fact pattern):
The CCT/JDN dated 31.07.2023 and JCCT (Enf) assignment are State internal orders. They do not by themselves reassign a Central taxpayer as a State taxpayer.
ACCT (Enf – State) can lawfully inspect under section 67 and report his findings. That much is fine.
But when DCCT (Audit‑1 – State) passes full adjudication orders for 2024‑25 and 2025‑26 on a Central GSTIN, purely on the strength of State administrative orders, there is a serious jurisdiction question.
Unless there is a CGST/SGST notification showing that DCCT (Audit‑1 – State) was cross‑empowered and the taxpayer was assigned to him for that demand, the safer reading is that he has over‑stepped.
For F.Y. 2023‑24, where only DRC‑01 from ACCT (Enf – State) is issued and adjudication is still pending with State Audit, and stop the proceedings at the SCN stage on jurisdiction and 6(2)(b) grounds.
8. How to challenge – writ before Karnataka High Court
For my client case, a writ petition can be structured as follows:
8.1 Grounds:
The petitioner is a Central‑administered GSTIN; there is no notification assigning jurisdiction to State officers for adjudication.
State Enforcement may inspect and assist, but DCCT (Audit‑1 – State) is not the proper officer to pass 74/74A orders for this GSTIN.
The CCT/JDN dated 31.07.2023 and JCCT assignment are internal; they cannot override statutory jurisdiction.
Passing orders for 2024‑25 and 2025‑26, and proceeding for 2023‑24, amounts to dual jurisdiction and violates section 6(2)(b).
The entire exercise also suffers from mechanical reliance on NGTP lists and denial of natural justice, but those are secondary once jurisdiction falls.
8.2 Reliefs:
Quash the DCCT (Audit‑1 – State) orders for 2024‑25 and 2025‑26 as without jurisdiction.
Quash or stay the DRC‑01 for 2023‑24 issued by ACCT (Enf – State).
Declare that for this GSTIN, only Central jurisdictional officers may initiate and conclude 74A proceedings on the disputed subject‑matter and periods.
Restrain any parallel or overlapping proceedings by State once Centre has acted, and vice‑versa, in line with section 6(2)(b) and High Court jurisprudence.
9. How State and Centre should actually work – an ideal model
If the law is followed in spirit, the process should look like this:
Registration and jurisdiction
Taxpayer is registered; portal shows whether he is Central‑ or State‑administered.
That “home” authority handles routine assessments, scrutiny, and adjudication.
Audit and inspection
Either side (State or Centre) may pick cases for audit or inspection under section 65/66/67, but should coordinate through system flags and internal communication.
If State audits a Central taxpayer, it should report its findings to the Central jurisdictional officer for further action, not run an independent 74A adjudication.
Adjudication:
Only one proper officer should issue DRC‑01 for a particular subject‑matter and period.
Once DRC‑01 is issued by that authority, all others should step back as per section 6(2)(b).
No double taxation, no double penalty
Taxpayers should not be exposed to two different demands and penalties on the same turnover and the same ITC for the same year from two sets of officers. This is the heart of the “one issue, one authority” rule.
10. Conclusion – why this must change
From a Mysore practitioner’s table, what I see today is simple: jurisdiction rules are being bent to meet targets. State Enforcement is taking up Central GSTINs on the strength of NGTP lists, running full 67 + 74A cycles, and then handing over to State Audit to sign massive orders. Later, Central officers pretend nothing has happened and want to start their own audits.
GST law does not permit this. Section 6(2)(b) is not a decorative clause; it is a statutory bar against dual proceedings. High Courts in Orissa, Calcutta, Himachal and other States have started enforcing this bar. Karnataka will also have to draw a clear line: once one authority has validly taken up a matter, the other cannot re‑litigate the same issue.
For centrally‑administered taxpayers, the message should be simple: State can come, inspect, collect data and share intelligence. But final adjudication must happen only under the officer who is legally assigned as “proper officer” for that GSTIN. Anything else is procedural overreach and invites writs, not compliance.
Taxpayers and professionals need to be aware of this, not to obstruct legitimate enforcement, but to ensure that jurisdictional discipline is maintained. GST is a national tax, but that does not mean every officer everywhere can adjudicate every GSTIN. The law still expects clarity of role, single authority per issue, and respect for natural justice.
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Author: S. PRASAD | Auditor & GST Practitioner, Mysore
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