Parallel GST Proceedings Barred as Section 6(2)(b) Prohibits Dual Adjudication

Parallel GST Proceedings by State and Central Authorities – Bar under Section 6(2)(b), Double Adjudication and Pre‑Deposit Hardship (A Practical Guide for Taxpayers and Professionals)

1. The problem on the ground

In theory, GST is “one nation, one tax”. In practice, many honest taxpayers are facing two sets of proceedings for the same year and same issue – one from the State GST authority and another from the Central GST authority.
one of  my client’s case, the State officer passed an adjudication order for a particular financial year, tax was paid in January 2025, and four–five months later the Central officer issued a separate adjudication order for the same financial year and same issue, raising a huge demand. This is precisely what Section 6(2)(b) was meant to prevent.

The immediate practical difficulty is that, if the taxpayer files an appeal under Section 107, he must pay 10% pre‑deposit of the disputed tax, which itself is unaffordable for many small businesses already drained by the first demand.

This article explains:

• What Section 6(2)(b) actually says and when “proceedings” are treated as initiated.
• How recent Supreme Court and High Court judgments have prohibited parallel proceedings by State and Centre on the same subject matter.
• How taxpayers can challenge a second order by the other authority without being forced into a second 10% pre‑deposit.
• A suggested litigation strategy and draft arguments in simple English.

2. Legal framework – Section 6(2)(b) and cross‑empowerment

2.1 Text and purpose of Section 6(2)(b)

Section 6(2)(b) of the CGST Act (and corresponding State provision) broadly provides that:

• Where one authority (Central or State) has already initiated proceedings on a particular matter, the other authority shall not initiate separate proceedings on the same subject matter.

The purpose is to avoid duplication and harassment and to ensure that, for a given taxable person, period and issue, only one adjudicating authority handles the case, although the other can always assist.

2.2 What is “initiation of proceedings”? – Supreme Court Armour Security (India) Ltd.

In 2025, the Supreme Court in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East clearly interpreted Section 6(2)(b).

Key findings:

• “Initiation of proceedings” under Section 6(2)(b) means the formal commencement of adjudicatory proceedings through issuance of a show cause notice (SCN), not merely summons, search or enquiry.
• Actions like inspection, search, seizure, summons, data‑gathering are pre‑adjudication steps, and do not, by themselves, trigger the bar under Section 6(2)(b).
• Once an SCN is issued by one authority for a particular contravention, tax period and liability, the other authority cannot issue a second SCN on the same subject matter.

The Supreme Court laid down a two‑fold test for deciding whether the “same subject matter” bar applies:

1. Is the second proceeding dealing with an identical liability or offence on the same facts and period?

2. Is the demand or relief sought identical or substantially overlapping with the first?

If the answer is yes to both, Section 6(2)(b) prohibits the second proceeding.

2.3 Parallel proceedings – High Court approach

Several High Courts have applied Section 6(2)(b) to stop dual jurisdiction:

• Shivalik International v. Joint Commissioner of State Tax (HP HC, 2025) – Once CGST initiated action under Section 67 for a given year and cause, the Himachal Pradesh High Court held that SGST could not start parallel proceedings for the same cause and period.
• The Court emphasised that only one authority should carry the proceedings; the other may assist but cannot run its own independent adjudication.
• Earlier judgments also held that State cannot issue a second SCN for the same matter once a Central SCN is already on record, and vice‑versa.

My client’s situation – State proceedings completed, tax paid, then Central proceedings for the same year and issue – falls squarely within this line of cases.

3. Your client’s case – why the second (Central) order is vulnerable

3.1 Facts in legal language

• SGST officer issued SCN and passed adjudication order for FY X, covering a specific issue (say, ITC denial/valuation/turnover mismatch).
• Taxpayer accepted or settled the matter and paid tax/interest/penalty in January 2025.
• After about 4–5 months, CGST officer issued a separate SCN and passed adjudication order for the same FY X and same issue, raising an additional demand.

From a Section 6(2)(b) perspective:

• Initiation: SGST proceedings were formally initiated when SGST SCN was issued.
• Same subject matter: If CGST order covers the same contravention, same transactions and same period, then the second SCN and order are barred.

3.2 How to test “same subject matter” in practice

Ask these questions:

• Are both orders on the same GSTIN, same financial year and same type of liability (say, ITC from cancelled suppliers, unreported outward supplies, valuation of same contracts)?
• Is CGST order effectively re‑adjudicating the same turnover/ITC/issue already decided by SGST order?

If yes, then under Armour Security and Shivalik International, Section 6(2)(b) is violated.

4. Pre‑deposit hurdle under Section 107 – and why writ is the realistic route

4.1 10% pre‑deposit is mandatory in normal appeal

Section 107(6) requires the appellant to pay:

• The admitted tax; and
• 10% of the disputed tax for the order under challenge.

Recent decisions (e.g. Impressive Data Services (Del HC, 2025) and others) have held that this 10% cannot be waived by appellate authority or even by High Court in routine writs, because the statute gives no discretion.

So, if your client files a normal appeal under Section 107 against the CGST order, he will be forced to deposit 10% again, despite having already paid for the same period under the State order.

4.2 When writ petition under Article 226 is justified

High Courts have repeatedly said that writ is justified where:

• The issue is of jurisdiction – for example, a second proceeding in violation of Section 6(2)(b).
• There is patent illegality or abuse of process, not just a disagreement on facts or quantification.

In such cases, courts treat the problem as a “lack of jurisdiction”, not as a simple assessment dispute. If the CGST officer lacked jurisdiction ab initio because Section 6(2)(b) barred him, then his order is a nullity and need not be challenged through the normal appeal route with pre‑deposit.

That is client’s strongest route: a writ petition directly against the CGST order, on the limited ground that it is barred by Section 6(2)(b) because SGST had already adjudicated the same subject matter.

5. Suggested litigation strategy – step by step

5.1 Collect and compare all documents

• Copy of SGST SCN and adjudication order – showing period, issue, legal provisions invoked.
• Evidence of payment of tax/interest/penalty under SGST order (challan etc.).
• Copy of CGST SCN and final order – again noting period, issue, and basis of demand.

Prepare a simple comparison chart (for annexure) showing:

If this table shows near total overlap, your Section 6(2)(b) argument is very strong.

5.2 Core grounds for writ petition:

Your petition can be framed broadly on these lines:

1. Bar under Section 6(2)(b)

• • SGST department had already initiated proceedings by issuing SCN dated … and passed order dated … for FY … covering the same alleged contravention.
  • As per the Supreme Court in Armour Security (India) Ltd., initiation of proceedings occurs on issue of SCN, and a second SCN on the same subject by another authority is barred.

2. Same subject matter test satisfied

• • Both orders pertain to the same subject matter, i.e. same set of transactions, same ITC from the same suppliers, same financial year, and same legal issue.
  • Under the two‑fold test laid down by the Supreme Court, Section 6(2)(b) is clearly attracted.

3. Parallel proceedings not permissible

• • High Courts, including Himachal Pradesh HC in Shivalik International, have held that once one authority proceeds, the other cannot initiate parallel proceedings for the same cause and period.
  • CGST could at best assist SGST; it could not start its own adjudication for the same issue.

4. Jurisdictional defect – pre‑deposit should not apply

• • The CGST order suffers from inherent lack of jurisdiction and is void; it is not merely an “irregular” order.
  • Therefore, forcing the petitioner into a Section 107 appeal with 10% pre‑deposit would amount to punishing the taxpayer for an illegal assumption of jurisdiction.

5. Relief sought

• • Quashing of CGST SCN and order as being without jurisdiction and contrary to Section 6(2)(b).
  • Direction that, if at all, only one authority (here, SGST) can continue to deal with the matter for that period.

You can optionally add a prayer that any sums already paid under the second order be adjusted or refunded, but emphasise that you are not challenging the merits, only the double proceedings.

6. Systemic issue – portals, non‑visibility and taxpayer burden

You rightly point out that:

• GSTN portal does not show cross‑linked proceedings between Centre and State; each side’s orders and SCNs are largely visible only in its own module.
• Taxpayers often receive multiple notices for the same year from both authorities, with no clarity that Section 6(2)(b) even exists.

Professional commentaries have flagged this as a structural flaw: the law bars parallel proceedings but the system design does not prevent or even warn officers.

I wish to add in my article that:

• GST Council and GSTN should build a common flagging mechanism that once an SCN is issued by one (Centre / State) for a GSTIN‑period‑issue, the other side’s system should automatically block issuance of another SCN on the same head without higher‑level approval.
• Until then, taxpayers have no option but to assert Section 6(2)(b) in replies and, where needed, approach High Courts.

Draft article conclusion – in my opinion:

For genuine taxpayers, double adjudication by State and Central GST on the same matter and year is not a mere procedural irritant – it is economic death. They pay once to one authority and then face a second, larger demand from the other, coupled with a second 10% pre‑deposit for appeal.

Section 6(2)(b) was inserted to prevent exactly this situation. The Supreme Court in Armour Security (India) Ltd. has now clarified that once an SCN is issued by one administration, the other cannot issue another SCN on the same subject matter, and that “proceedings” in this provision means adjudicatory proceedings, not merely enquiries.

High Courts such as Himachal Pradesh in Shivalik International have followed this logic and prohibited parallel proceedings, recognising that only one authority should hold the field, with the other confined to an assisting role.

In my considered view, where a taxpayer has already undergone full adjudication by the State authority, paid tax as per order, and later receives a second adjudication order from Central authority for the same year and issue, the Central order is without jurisdiction and should be challenged directly in writ on the strength of Section 6(2)(b) and Armour Security, without being forced into another pre‑deposit. The problem is not merely of procedure; it is a violation of the statutory protection built into the GST design.

Going forward, professionals should:

• Carefully compare all SCNs and orders from State and Centre for each year to identify same‑subject‑matter overlaps.
• Raise Section 6(2)(b) at the earliest stage in replies.
• Reserve the writ remedy for clear dual‑proceedings cases, framing the issue as jurisdictional, not as a routine factual dispute.

This approach can provide real relief to small and medium taxpayers who are otherwise unable to bear even a second 10% pre‑deposit, leave alone the risk of double tax recovery on the same transactions.