2026-VIL-1137-DEL
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SGST High Court Cases

GST - Section 6(2)(b) of the CGST Act, 2017 - Bar on parallel proceedings on the same subject matter - Petitioner was proceeded against by the Central authorities under Section 74 for availing ITC on invoices without receipt of goods from a supplier, while the State authorities had earlier initiated separate proceedings under Section 73 for different financial years in respect of ITC from the same supplier - Whether the Central proceedings are without jurisdiction in view of Section 6(2)(b) of the CGST Act because the State authorities had earlier initiated proceedings concerning the same supplier - HELD - The bar under Section 6(2)(b) operates only where the subsequent proceedings are in respect of the same subject matter. The Supreme Court in in M/s Armour Security case has explained that the subject matter has to be identified with reference to the particular tax liability, deficiency or obligation arising from the alleged contravention. Whether two proceedings concern the same subject matter cannot be determined merely by identifying a common supplier or by observing that both relate to ITC, but requires examination of the tax period, the particular transactions and invoices, the precise ITC involved, the allegations in the respective notices and the liability each authority seeks to determine - The State proceedings were initiated separately for different financial years and under Section 73, whereas the Central proceedings were under Section 74 on allegations of fraud, wilful misstatement or suppression. The State proceedings initiated or concluded after the Central initiation cannot render the Central proceedings without jurisdiction. The exercise is essentially factual and requires examination of the respective notices, replies, orders and transaction-wise material, and the appellate authority is better placed to examine whether, to the extent of any particular liability, the bar is attracted - The contention that the Central proceedings are wholly barred by Section 6(2)(b) is not accepted, and the Petitioner is not precluded from raising the objection before the appellate authority - Writ jurisdiction under Article 226 against an Order-in-Original under Section 74 despite statutory appellate remedy - Petitioner challenged the Demand-cum-Show Cause Notice and the Order-in-Original confirming ITC demand, interest and penalty - Whether the High Court should interfere under Article 226 notwithstanding the availability of the statutory appellate remedy - HELD - The mere description of an objection as one of jurisdiction or natural justice does not by itself require the Court to exercise writ jurisdiction, and the Court must examine the substance of the objection and the nature of the adjudication. The order rests independently on the finding of non-receipt of goods and availment of ITC on goods-less invoices recorded with reference to Section 16(2)(b), and the invocation of Section 74(1) is based on the conclusion of fraud, wilful misstatement or suppression, so it is not established that the demand is founded on a new and unrelated ground - The order records that opportunities of personal hearing were granted and that replies were considered, and an apparent date discrepancy cannot by itself establish that no hearing was granted but at the highest calls for verification of the record – Further, clubbing of more than one financial year does not by itself render the proceedings void, and limitation and the sufficiency of material to establish the ingredients of Section 74 are matters for the appellate authority. Writ jurisdiction is not intended to substitute the statutory appellate examination of the merits - The challenge to the show cause notice cannot survive independently once a reasoned Order-in-Original has been passed - The Writ Petition is dismissed
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