Jurisdictional Objection in Parallel GST Proceedings: Allahabad HC Declines to Invoke Extraordinary Jurisdiction [Read Order]

The Allahabad High Court refused to exercise its extraordinary jurisdiction under Article 226 of the Constitution on jurisdictional objections raised against parallel proceedings by the State and Central GST ( Goods and Services Tax ) authorities.

The bench of Justice Saumitra Dayal Singh and Justice Indrajeet Shukla held that the issue of jurisdiction raised by the assessee could not be determined purely as a question of law, as it involved factual examination of the subject matter of the two sets of proceedings.

M/s Meerut Steels, the petitioner challenged the order dated January 17, 2025, passed by the Central GST authority under Section 74 of the CGST Act, 2017, read with Section 74 of the UPGST Act, 2017, and Section 20 of the IGST Act, 2017.

The petitioner contended that similar proceedings had already been concluded by the State GST department on the same subject matter through adjudication orders dated June 20, 2022, and January 31, 2024, under Sections 73 and 74 of the UPGST Act, respectively.

It was argued that the second proceeding by the Central authority violated Section 6(2)(b) of the CGST Act and the CBIC circular dated October 5, 2018, which prevents duplication of proceedings between State and Central authorities.

The petitioner asserted that the Central adjudicating authority had committed a jurisdictional error by not adhering to the coordination mechanism prescribed between the two tax administrations.

Despite raising the objection, the adjudicating officer merely reduced the amount of Input Tax Credit (ITC) already reversed by the State authorities without dropping the proceedings.

The Revenue, opposing the writ petition, contended that the petitioner had been duly heard and had participated in the proceedings. It was submitted that there was no inherent lack of jurisdiction and that the petitioner could raise all grievances, including the jurisdictional objection, before the appellate authority.

The department further clarified that the transactions under dispute before the Central and State authorities were distinct, pertaining to different supplies and ITC claims, and therefore did not constitute the same “subject matter.”

“Fact issues would have to be gone into before any firm conclusion may be drawn if the 'subject matter' of the two sets of proceedings-one initiated by the State GST authorities and the other initiated by the Central GST authorities was one and the same. Prima facie, the Central GST authorities initiated proceedings and have passed the order for an amount different from that which was considered by the State GST authorities”, said the bench noting the issue raised was not purely legal but fact-dependent.

The Court held that, “The issue of lack of jurisdiction being pressed by learned counsel for the petitioner is not a pure question of law arising in the facts of the present case. Rather, decision on the same would hinge on fact findings as well.”

The bench concluded that there was no justification for the High Court to interfere under Article 226, given that an alternate statutory remedy was available.

The Court further clarified that the petitioner would be entitled to raise all grounds, including the jurisdictional objection, before the appellate authority. The petitioner was directed to file an appeal within three weeks and directed the appellate authority should entertain it on merits without dismissing it on limitation grounds.

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