Challenge to Parallel GST Proceedings: Allahabad HC Directs State GST to address Jurisdiction Issue Before Continuing S. 74 Proceedings [Read Order]
The Court directed the petitioner to raise the jurisdictional objection before the State GST authorities in response to the show cause notice
With regards to the challenge to the parallel proceedings under GST (Goods and Services Tax), the Allahabad High Court has directed state GST authorities to address the jurisdiction before any further proceedings under Section 74 of the CGST/UPGST Act.
The petitioner, Hari Om Udyog, challenged the notices in Form DRC-01 dated 26 June 2025 issued under Sections 74 and 122 of the UPGST Act for the tax period April 2018-March 2019. These notices were issued by the Deputy Commissioner, State Tax, Sector-9, Ghaziabad, pursuant to a search and seizure carried out on 26 July 2024 by the State Tax Special Investigation Branch (SIB).
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The petitioner argued that the Central GST authorities had already raised a demand under Section 74 in respect of the same tax period. Therefore, in view of Section 6(2)(b) of the GST Act, which bars parallel proceedings by different tax authorities on the same subject matter, the State GST action was without jurisdiction and liable to be quashed.
A Division Bench comprising Justice Shekhar B. Saraf and Justice Praveen Kumar Giri noted that the petitioner had raised a preliminary jurisdictional objection, contending that once proceedings were initiated by the Central authorities, the State authorities could not initiate parallel proceedings for the same cause.
The Court directed the petitioner to raise the jurisdictional objection before the State GST authorities in response to the show cause notice. It further said that the authorities must first adjudicate this preliminary objection before proceeding with any action under Section 74 of the GST Act.
The Bench clarified that the petitioner should be given an opportunity of personal hearing, ensuring that the jurisdictional issue is decided fairly and in accordance with law before the merits of the proceedings are taken up. Accordingly, the petition was disposed of.
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