Parallel GST Proceedings by State and Central Authorities – M/s
Maa Jagdambe Engineering Works
M/s Maa Jagdambe Engineering Works v. Commissioner of Trade
& Taxes & Ors. (W.P.(C) 3635/2026 & CM APPL. 17745/2026)
Background
of the Case
The case concerned the
validity of parallel proceedings initiated by the State GST Authority and the
Central GST Authority against the same taxpayer in respect of overlapping
entities.
The petitioner, M/s Maa
Jagdambe Engineering Works, challenged the order dated 18 December 2025 passed
by the State GST Authority. The said order was based on a Demand-cum-Show Cause
Notice dated 02 July 2025.
Prior to the State GST
proceedings, the CGST Authority had already issued a Show Cause Notice dated 28
June 2025. Importantly, the CGST notice covered 17 entities, out of which 9
entities overlapped with the subsequent proceedings initiated by the State GST
Authority.
The petitioner therefore
objected to the continuation of the State GST proceedings, relying upon the
statutory mandate contained in Section 6 of the CGST Act, 2017.
Issue
Involved
The principal issue
before the Delhi High Court was:
Whether the State GST
Authority could continue adjudication proceedings in respect of the same
entities when the CGST Authority had already initiated proceedings concerning
those entities through an earlier Show Cause Notice.
The issue was examined
particularly in the context of Section 6 of the CGST Act, 2017, which
deals with the powers of officers under the State/Union Territory GST law and
the circumstances in which proceedings are to be handled by the appropriate
authority.
Submissions
of the Petitioner
The petitioner submitted
that the CGST Authority had already assumed jurisdiction over the matter by
issuing the Show Cause Notice dated 28 June 2025.
Since the CGST notice was
prior in time to the State GST notice dated 02 July 2025, continuation
of the State proceedings in respect of the overlapping entities was objected to
as being contrary to the statutory mandate of Section 6 of the CGST Act.
It was further submitted
that proceedings under Section 74 of the CGST Act had already been
initiated by the CGST Authority for the financial years 2020-21, 2021-22 and
2022-23. Accordingly, the impugned State GST proceedings were contended to
be without jurisdiction.
The petitioner had also
specifically informed the State GST Authority about the earlier CGST
proceedings through a communication dated 22 July 2025.
Stand of
the CGST Authority
The CGST Authority
supported the petitioner's contention regarding the priority of its
proceedings.
The CGST Authority stated
that its proceedings should hold the field because its Show Cause Notice dated 28
June 2025 was issued before the State GST Authority's notice dated 02
July 2025.
It was therefore
submitted that the State Authority should “keep their hands off” the
overlapping matter.
Stand of
the State GST Authority
The State GST Authority
contended that even if the petitioner had not supplied the CGST Show Cause
Notice and other details, the authority could still proceed against the
petitioner in respect of the entities covered by the notice.
It was also argued that
the CGST Authority could subsequently ignore those entities for which the State
Authority had already completed assessment and adjudication.
On this basis, the State
Authority sought dismissal of the writ petition, also referring to the
availability of an alternate remedy of appeal.
Findings of
the Delhi High Court
The Delhi High Court
noted that there was no dispute regarding the overlapping entities. The
CGST Show Cause Notice dated 28 June 2025 covered nine entities which were also
covered by the subsequent State GST proceedings.
The Court specifically
noted that the CGST notice was prior in point of time to the State GST
notice.
A significant factor was
that the petitioner had already brought this fact to the attention of the State
GST Authority through its communication dated 22 July 2025. However, the
State Authority failed to deal with this objection in the impugned order.
GST Portal
Records Must Be Examined
The Court made an
important observation regarding the availability of GST proceedings on the
common GST portal.
The Court noted that the
documents relating to the CGST Show Cause Notice and the petitioner's reply
were available on the GST portal, to which both authorities had access.
Accordingly, the State
GST Authority was duty-bound, having regard to the statutory mandate of Section
6 of the CGST Act, to examine the GST portal and ascertain the material
already available on record.
Thus, the absence of a
physical copy of the earlier Show Cause Notice before the State Authority could
not, by itself, justify continuation of proceedings when the relevant documents
were available on the GST portal.
Decision of
the Court
After considering the
facts and rival submissions, the Delhi High Court held that the overlapping
proceedings initiated by the CGST Authority were established from the record.
The Court therefore:
1. Quashed
and set aside the impugned order dated 18 December 2025
passed by the State GST Authority.
2. Directed
that the State GST Show Cause Notice dated 02 July 2025, issued under Section
73 of the CGST Act, be kept in abeyance.
3. Directed
the CGST Authority to complete adjudication against the petitioner
within four months from the date of the judgment.
4. Directed
that a copy of the CGST adjudication order be made available to both the State
GST Authority and the petitioner.
5. Clarified
that after receiving the CGST adjudication order, the State GST Authority could
take a decision regarding its Show Cause Notice dated 02 July 2025, keeping in
view the statutory mandate of Section 6 of the CGST Act.
6. Ultimately,
the writ petition was allowed.
Key Legal
Principle
The judgment is significant
because it reinforces the importance of avoiding overlapping GST proceedings by
Central and State authorities in respect of the same subject matter/entities.
Where proceedings have
already been initiated by one GST authority and a subsequent proceeding is
initiated by another authority concerning overlapping matters, the authorities
are required to consider the statutory framework under Section 6 of the CGST
Act.
The judgment also
emphasizes that GST authorities cannot ignore information already available on
the GST portal. Where the portal contains the earlier Show Cause Notice
and related documents, the concerned authority is expected to examine those
records before proceeding further.
Practical
Importance for GST Litigation
This judgment can be
particularly useful in cases where a taxpayer receives parallel notices from
CGST and SGST authorities involving the same transaction, sup
plier/customer, entities,
or overlapping issues.
If a taxpayer has already
received a notice from one authority and subsequently receives another notice
from the other GST authority covering the same subject matter, the taxpayer
should:
- Immediately bring the earlier
proceedings to the notice of the subsequent authority.
- Provide details of the earlier Show
Cause Notice.
- Specifically invoke the statutory
protection/mandate under Section 6 of the CGST Act.
- Place the earlier proceedings and
relevant documents on record.
- Point out any overlapping entities,
tax periods and allegations.
- Request that the subsequent
proceedings be kept in abeyance.
- Preserve evidence showing that the
earlier proceedings were initiated before the subsequent proceedings.
The present judgment is
especially useful because the Court recognized that the relevant documents were
available on the GST portal and held that the authority was duty-bound to
examine the portal records.
Conclusion
The Delhi High Court's
decision in M/s Maa Jagdambe Engineering Works v. Commissioner of Trade
& Taxes & Ors. provides an important safeguard against simultaneous
and overlapping GST proceedings by Central and State authorities.
The Court quashed the
State GST order because the CGST proceedings had been initiated earlier, the
subject matter involved overlapping entities, and the State authority had
failed to properly consider the petitioner's objection based on Section 6 of
the CGST Act.
The judgment also
establishes an important procedural principle: GST authorities must examine
relevant proceedings and documents available on the GST portal before
proceeding with adjudication, particularly where the taxpayer specifically
brings such proceedings to their notice.
Accordingly, this ruling
can be relied upon in appropriate GST litigation where parallel proceedings by
CGST and SGST authorities concern the same subject matter and the earlier
proceeding was initiated by one authority before the other authority commenced
its proceedings.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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