M/S Friends Alloys vs. UOI And Others

Held

The High Court, applying the conclusions and guidelines from the Supreme Court's judgment in M/s Armour Security (India) Ltd., disposed of the petition. The Court directed the petitioner to appear before the Central Authority and file a response to the show cause notice by December 15, 2025, raising all contentions and relevant documents as per the Armour case. The petitioner was also directed to comply with the summons and intimations from the State authorities, informing them about the issuance of the Central Authority's show cause notice, in line with paragraphs 97(a) & (b) of the Armour judgment. Subsequently, the State Authority was to communicate with the Central Authority to verify the petitioner's claim, as per paragraph 97(c) of the Armour judgment. Both authorities were instructed to coordinate to prevent multiple adjudicatory processes on the same subject matter, following the Armour verdict. The adjudicatory authority would then proceed in accordance with law, including providing the petitioner an opportunity to be heard. The Court explicitly stated it had not expressed any opinion on the merits of the allegations or the validity of the notices, keeping all rights and contentions open.

Facts

The petitioner, M/s Friends Alloys, filed a writ petition challenging notices and summons issued by the Central GST authorities. The petitioner contended that these actions violated Section 6(2)(b) of the CGST Act, 2017, which prohibits parallel proceedings on the same subject matter when proceedings have already been initiated by another jurisdictional authority. The petitioner argued that the State GST Authority had initiated proceedings earlier. The Central GST authorities submitted they would abide by Section 6(2)(b) and the principles laid down by the Supreme Court in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr. The State GST authorities also indicated compliance with the statutory mandate and coordination to avoid parallel adjudicatory proceedings.

Key Issues

1. Whether the issuance of summons and a show cause notice by the Central GST authority, in light of prior summons and intimations (including DRC-01A) issued by the State GST authority, constitutes 'parallel proceedings' barred by Section 6(2)(b) of the CGST Act, 2017, on the same subject matter? Petitioner's contention: The petitioner argued that the prior initiation of proceedings by the State GST Authority on the same subject matter bars the Central GST Authority from initiating further proceedings under Section 6(2)(b) of the CGST Act. They sought quashing of the impugned notices and summons. Respondents' contention: The State and Central GST authorities stated they would abide by Section 6(2)(b) of the CGST Act and the principles laid down in the Supreme Court's judgment in M/s Armour Security (India) Ltd. They assured appropriate coordination to prevent parallel adjudicatory proceedings. The respondent No.4 (Central Authority) also referred to High Court judgments directing petitioners to present their case before competent authorities for decision in terms of the Armour case.