The Delhi High Court, in the case of Sun Automation Ltd. v. Sales Tax Officer Class II, has ruled that parallel proceedings by Central and State Goods and Services Tax (GST) authorities are not permissible under the GST regime. This decision came after M/s Sun Automation Limited challenged a Show Cause Notice and subsequent Adjudication Order issued by the Sales Tax Officer Class II/AVATO jurisdiction, raising a demand of ₹157.66 crores. The Petitioner argued that the Central Goods and Services Tax (CGST) Department had already adjudicated the same matter and imposed a penalty. The High Court, relying on a previous judgment in Amit Gupta v. Union of India & Ors, affirmed that parallel proceedings violate Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”), and that cross-empowerment does not permit duplication of adjudication. Consequently, the Delhi High Court set aside the Impugned Order issued by the Delhi Goods and Services Tax (DGST) Department and directed that the CGST Appellate Authority’s order be considered afresh, with a personal hearing granted to the Petitioner.
Facts:
M/s Sun Automation Limited (“the Petitioner”) challenged the Show Cause Notice (“SCN”) dated November 27, 2024 and the subsequent Adjudication Order dated February 27, 2025 (“the Impugned Order”) issued by Sales Tax Officer Class II/AVATO jurisdiction (“the Respondent”), pertaining to tax period April 2020 to March 2021 raising a demand of ₹157.66 crores against the petitioner. The Petitioner contended that the CGST Department had already adjudicated on the same matter, and the Commissioner (Appeals-I), CGST, had already passed an Order in Appeal dated April 03, 2025, imposing a penalty on the petitioner. Hence, aggrieved by the Impugned Order, the Petitioner has filed the present writ petition.
Issue:
Whether parallel proceedings by the CGST/SGST authorities are permissible under the GST regime?
Held:
The Hon’ble Delhi High Court in Writ Petition (Civil) 5734 of 2025 held as under:
- Noted that, the appellate order passed by the CGST Appellate Authority had not been considered by the DGST department when issuing the Impugned Order.
- Relied On, in the case of Amit Gupta v. Union of India & Ors [Writ Petition (Civil) 8625/2022], where it was held that parallel proceedings violate the mandate of Section 6(2)(b) of the CGST Act and cross-empowerment does not mean duplication of adjudication.
- Held that, the Impugned Order was liable to be set aside, and, the Order of Commissioner (Appeals-I), CGST dated April 3, 2025, shall be placed before the DGST Department so that the matter can be considered afresh. A personal hearing shall be afforded to the Petitioner, before taking any decision.
****
(Author can be reached at info@a2ztaxcorp.com)
Author Bio
