Shree Maruti Stone Industries Vs Assistant Commissioner (Gujarat High Court)
Summary : The Gujarat High Court quashed the order dated 25.01.2025 challenged by Shree Maruti Stone Industries because the consolidated demand included financial years already covered by State proceedings. The petitioner challenged the notice dated 02.08.2025 and the order dated 25.01.2025 on the ground that they violated section 6(2)(b) of the Central Goods and Services Tax Act, 2017. At the outset, advocates for both sides sought remand in view of paragraph 14 of the respondents’ affidavit dated 26.11.2025.
The petitioner relied on M/s. Armour Security (India) Limited vs. Commissioner, CGST, Delhi East Commissionerate and Anr., (2025) 33 Centax 222 (S.C.), particularly paragraphs 96 and 97. The respondents’ counsel accepted that the Supreme Court had settled the issue. The High Court noted that section 6(2)(b) bars proceedings that overlap in assessing or recovering the same tax liability, deficiency or obligation arising from a particular contravention. Proceedings concerning distinct infractions are not barred merely because the liability or deficiency is similar. The respondents’ affidavit stated that State proceedings covered FYs 2017-18 and 2018-19, whereas the Central notice covered July 2017 to November 2022, including unexamined periods. It also advanced an argument about adjustment of excess recovery or duplication under section 79(1).
The impugned order nevertheless confirmed demand for July 2017 to November 2022, including the overlapping years, with applicable interest and penalty. In view of the consolidated demand and the overlap recorded in the affidavit, the Court set aside the order and remanded the matter for a fresh order excluding FYs 2017-18 and 2018-19. Accepting the respondents’ request, it permitted a fresh order in accordance with law within two weeks from receipt of its order. The petitioner was left free to approach the appropriate forum if aggrieved by the fresh order.
Cases Discussed
- M/s. Armour Security (India) Limited vs. Commissioner, CGST, Delhi East Commissionerate and Anr., (2025) 33 Centax 222 (S.C.) (Supreme Court); Special Leave Petition (C) No. 6092 of 2025; Decision Date: 14/08/2025 — Relied upon for the distinction between overlapping proceedings on the same subject matter and proceedings concerning distinct infractions under section 6(2)(b), particularly paragraphs 96 and 97.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1.At the outset, learned advocates appearing for the respective parties have submitted that the matter may be remanded to the respondent authorities for passing a fresh order in view of the averments made in paragraph No.14 of the affidavit dated 26.11.2025 filed by the respondents.
2. In the present petition, the petitioner thus, has challenged the notice dated 02.08.2025 and the order dated 25.01.2025 on the ground that the same is in violation of provision of section 6(2) (b) of the Central Goods and Services Tax Act, 2017 (for short “the CGST Act”).
3.At the outset, learned advocate Mr.Desai appearing for the petitioner has submitted that the issue is squarely covered by the decision of the Apex Court in the case of M/s. Armour Security (India) Limited vs. Commissioner, CGST, Delhi East Commissionerate and Anr., (2025) 33 Centax 222 (S.C.), more particularly paragraph Nos.96 and 97.
4.Learned Senior Standing Counsel Mr. Lakhani has fairly admitted that the issue raised in the present petition is laid quietus by the Apex Court.
5.While dealing with the provision of section 6(2)(b) of the CGST Act, the Apex Court has held that where two department proceedings overlap in assessing or recovering same tax liability/ deficiency/obligation arising from any particular contravention, the bar under section 6(2)(b) of the CGST Act applies, where they relate to distinct infractions, does not even if liability of deficiency is similar.
6.In the present case, after issuance of the show-cause notice, the respondents have filed affidavit-in-reply admitting overlapping of the proceedings covered for the Financial Years (FY) 2017-18 and 2018-19. The relevant portion of the show-cause notice is incorporated as under:
“14. It is to be submitted that, It is also respectfully submitted that Section 6(2)(B) operates when the same subject matter is seized by the other authority. While in present case, the State proceedings covered periods FY 2017-18 and FY 2018-
19, and the impugned notice by the Central authority covered a broader period July 2017- November 2022, including unexamined periods. Therefore, the subject matter and cause of action are distinct, and restrictions of Section 6(2)(b) is not attracted at least for the period between 2019-2022. Even otherwise, Section 79(1)of the CGST Act provides for adjustment of any excess recovery or duplication through rectification or appeal. Hence, the alleged double demand is premature until final quantification and cross-verification. The petitioner’s claim of lack of jurisdiction and duplication of demand does not hold any ground in the eyes of law.”
7.In the impugned order dated 25.01.2025, the respondent authorities have determined and confirmed the demand for the tax period starting from July 2017 to November, 2022. Thus, the overlapping period for FYs 2017-18 and 2018-19 is also considered for fixing the demand towards recovery of applicable interest and penalty.
8.Thus, in view of the consolidated demand including the overlapping Financial Years as mentioned hereinabove and as mentioned in paragraph No.14 of the affidavit-in-reply, we hereby quash and set aside the impugned order dated 25.01.2025 and remand the matter to the appropriate authorities to pass fresh order excluding the period of FYs 2017-18 and 2018-19.
9.Learned Senior Standing Counsel Mr.Lakhani has urged that the respondents may be granted two weeks’ time to pass fresh orders.
10.We accede to the request. It will be open for the respondent authorities to pass a fresh order in accordance with law within a period of two weeks from the date of receipt of this order. If the petitioner is aggrieved by such order, it may file appropriate application before appropriate forum.
