M/S Radha Krishan Industries vs. The UOI And Others

Held

The Court held that the issue of parallel proceedings under Section 6(2)(b) of the CGST Act has been substantially resolved by the Apex Court in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr. The Court noted that the Apex Court's judgment clarifies the scope of 'initiation of proceedings', 'subject-matter', and the inter-relationship between Central and State GST Authorities. Specifically, the Apex Court held that Clause (b) of sub-section (2) of Section 6 bars the initiation of any proceedings on the same subject matter. Any subsequent proceedings inconsistent with Section 6(2)(b) must give way to the proceedings first initiated. The Court found that the facts of the present case warranted directions consistent with the law declared in Armour Security. Accordingly, the Court directed the Petitioner to appear before the Central Authority and file a response to the SCN by 01.06.2026, raising contentions in terms of the Armour judgment. The Petitioner was also directed to comply with summons/notices from both authorities and inform the State authorities about the SCN. The State and Central Authorities were directed to communicate and coordinate to avoid multiple adjudicatory processes on the same subject matter, following the Armour Security verdict. The Court explicitly stated it had not expressed any opinion on the merits of the allegations or the validity of the SCN or summons.

Facts

M/s. Radha Krishan Industries (Petitioner) filed a writ petition challenging proceedings initiated by Respondent No. 4, a Central GST authority, and a Show Cause Notice (SCN) dated 02.08.2024 issued by Respondent No. 5. The Petitioner contended that these actions were without jurisdiction and contrary to Section 6 of the CGST Act and the HPGST Act, as proceedings concerning the same subject matter had been initiated by State GST Authorities since 2018. The Petitioner sought to quash the SCN and the proceedings initiated by the Central GST authorities, arguing that Section 6(2)(b) of the CGST Act prohibits parallel proceedings on the same subject matter when one authority has already initiated proceedings. The amount in dispute was not explicitly stated.

Key Issues

1. Whether the Show Cause Notice dated 02.08.2024 issued by the Central GST authority (Respondent No. 5) is without jurisdiction and contrary to Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act) and the Himachal Pradesh Goods and Services Tax Act, 2017 (HPGST Act), given that proceedings were allegedly initiated earlier by the State GST Authority? Petitioner's contention: The Petitioner argued that the initiation of proceedings by the Central GST authority is barred by Section 6(2)(b) of the CGST Act because the State GST Authority had already initiated proceedings concerning the same subject matter since 2018. They relied on the principle that parallel proceedings on the same subject matter are prohibited. Revenue/State's contention: The respondents (Union of India, Central GST authorities, and State GST authorities) submitted that they would abide by the statutory mandate under Section 6(2)(b) of the CGST Act and the principles laid down by the Apex Court in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr. They assured that appropriate coordination would be maintained to prevent parallel adjudicatory proceedings. They also referred to other High Court judgments directing petitioners to present their case before competent authorities in terms of the Armour Security judgment.