M/S H.M. Steels LTD vs. The Joint Commissioner

Held

The Court held that the issue of parallel proceedings under Section 6(2)(b) of the CGST Act is substantially resolved by the Apex Court's decision in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr. The Court applied the conclusions and guidelines from the Armour Security case to the present facts. It directed the petitioner to appear before the Central Authority by May 15, 2026, to raise issues and contentions. The petitioner was also directed to comply with summons and intimations from the State Authority, informing them about the issuance of any Show Cause Notice by the Central Authority, as per para 97(a) & (b) of the Armour judgment. The State Authority was instructed to communicate with the Central Authority to verify the petitioner's claim, and both authorities were directed to coordinate to prevent multiple adjudicatory processes on the same subject matter. The adjudicatory authority would then proceed in accordance with law. The Court explicitly stated it had not expressed any opinion on the merits of the allegations or the validity of any notices.

Facts

The petitioner, M/s H.M. Steels Limited, filed a writ petition challenging proceedings initiated by Respondent No. 4, the Directorate General of GST Intelligence, Gurugram Zonal Unit. The petitioner argued these proceedings were without jurisdiction and contrary to Section 6 of the CGST Act and the HPGST Act, which prohibits parallel proceedings on the same subject matter when proceedings have already been initiated by another jurisdictional authority. The State Authority (Respondent No. 3) had also issued summons and an intimation (DRC-01A). The core issue revolved around which authority's proceedings should prevail, given the potential for parallel adjudication.

Key Issues

1. Whether the proceedings initiated by Respondent No. 4 (Central Authority) are without jurisdiction and contrary to Section 6(2)(b) of the CGST Act and the HPGST Act, given that the State Authority had previously initiated proceedings on the same subject matter? Petitioner's Contention: The petitioner argued that the proceedings initiated by the Central Authority were without jurisdiction and violated Section 6(2)(b) of the CGST Act, which prohibits parallel proceedings on the same subject matter. They relied on the principle that once proceedings are initiated by one authority, another cannot initiate parallel proceedings. Respondents' Contention: The respondents, through their counsel, referred to judgments from various High Courts (Agrawal Soya Extracts, Sensation Infracon, Ravi Steel Industries) which directed petitioners to present their cases before competent authorities, with GST Authorities directed to decide in terms of the Armour Security case. They also highlighted that legitimate investigative steps, such as summons, are permissible as long as they do not amount to parallel adjudication.