H.M. Steels Limited Vs Joint Commissioner (Himachal Pradesh High Court)
The Himachal Pradesh High Court dealt with a writ petition filed under Article 226 of the Constitution challenging proceedings initiated by Central GST authorities on the ground that they were without jurisdiction and violated Section 6 of the Central Goods and Services Tax Act, 2017 (CGST Act). The central issue concerned the prohibition under Section 6(2)(b) against initiation of parallel proceedings on the same subject matter when proceedings have already been initiated by another authority.
The Court noted that the issue is no longer res integra and stands settled by the Supreme Court in Armour Security (India) Ltd., which laid down authoritative principles on the scope of “initiation of proceedings,” “subject matter,” and coordination between Central and State GST authorities. The Supreme Court clarified that “initiation of proceedings” refers to formal adjudicatory proceedings such as issuance of a show cause notice, and not preliminary steps like summons, search, or seizure. It also explained that the bar under Section 6(2)(b) applies where two proceedings relate to the same subject matter, meaning identical or overlapping tax liability arising from the same contravention.
Further, the Supreme Court provided detailed guidelines requiring coordination between authorities to avoid duplication. It directed that taxpayers must comply with summons and inform authorities of overlapping proceedings, and that authorities must communicate with each other to determine whether the subject matter is the same. Where overlap exists, only one authority should continue proceedings, and the other must transfer material.
