Parallel GST Proceedings on Same Issue Invalid under Section 6(2): Orissa HC quashes DGGI Demand [Read Order]

The Orissa High Court has quashed the Order-in-Original issued by the Assistant Commissioner, against an Engineering and Construction Company, holding that parallel proceedings on the same subject matter under Section 74 of the Central Goods and Services Tax Act ( GST ), 2017, are barred under Section 6(2)(b) of the Goods and Services Tax Act.

A Division Bench comprising Chief Justice Harish Tandon and Justice Murahari Sri Raman delivered the judgment on October 14, 2025, in W.P.(C) No. 15935 of 2025, filed by the petitioner firm through its partner, Mr. Sanjay Bangal.

The Bench set aside the DGGI’s show cause notice dated August 13, 2021, and the consequent Order-in-Original dated January 30, 2025, observing that the same issue had already been adjudicated by the State GST authorities.

The petitioner, a registered works contractor under GST, had earlier faced adjudication by the Additional State Tax Officer, Rourkela-II Circle, under Section 74 of the OGST/CGST Acts for the tax periods between December 2017 and March 2019, concerning alleged wrongful availment of Input Tax Credit (ITC) on fake invoices issued by two non-existent suppliers, M/s M.G. International and M/s M.S. Traders. The State authority passed orders in April 2023 and corresponding appeals were disposed of in early 2024.

Subsequently, the Directorate General of GST Intelligence (DGGI), Rourkela Unit, initiated a separate proceeding on August 13, 2021, issuing a show cause notice based on the same allegations and later confirming demands through an Order-in-Original dated January 30, 2025. This led the petitioner to challenge the jurisdiction of the DGGI, asserting that once the State Proper Officer had initiated proceedings under Section 74, a Central Officer could not reopen the same issue.

Senior Advocate Rudra Prasad Kar, assisted by Advocates Madhab Lal Agarwal and others, argued that the DGGI’s proceedings were ultra vires Section 6(2)(b) of the CGST Act, as they duplicated the earlier adjudication already undertaken by the State tax authorities.

He cited the Supreme Court’s decision in Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate, which clarified that once proceedings are initiated by one tax administration, another authority cannot commence proceedings on the same subject matter.

The Central authorities contended that issuance of summons under Section 70 by the DGGI in 2019 constituted prior initiation. However, the High Court rejected this view, citing that summons or investigation steps do not amount to initiation of “proceedings” under Section 6(2)(b).

The Bench meticulously analyzed Section 6 of both the CGST and OGST Acts and reiterated that once a proceeding on a specific subject matter is initiated by one Proper Officer, either State or Central, the other authority is barred from initiating another on the same issue. Referring to the Armour Security ruling, the Court emphasized that the term “initiation of proceedings” means formal commencement through a show cause notice, not preliminary inquiries like summons.

Holding that the State GST authorities had issued show cause notices earlier (on July 2 and July 30, 2021) and completed adjudication, the Court concluded that the DGGI’s subsequent notice dated August 13, 2021, and Order-in-Original dated January 30, 2025, were without jurisdiction and hence void.

Allowing the writ petition, the Orissa High Court quashed the DGGI’s show cause notice and the corresponding Order-in-Original, as well as the consequential demand summaries in Form DRC-07 dated January 31, 2025.

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