# M/s Armour Security (India) Ltd v. Commissioner, CGST, Delhi East Commissionerate & Anr

- **Citation:** 2025 INSC 982
- **Court:** Supreme Court of India
- **Decided:** 2025-08-14
- **Bench:** J.B. Pardiwala, R. Mahadevan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-armour-security-india-ltd-v-commissioner-cgst-delhi-east-commissionerate-anr-38628
- **Pages:** 62

## Headnote

The High Court dismissed the writ petition filed by the petitioner
herein, and declined from interdicting the summons dated
16.01.2025 and 23.01.2025 respectively, issued to the petitioner
u/s.70 of the Central Goods and Services Tax Act, 2017 (CGST
Act) by the Commissioner, Central Good and Services Tax, Delhi
East Commissionerate (respondent no.1).
Headnotes†
Central Goods and Service Tax Act, 2017 - s.6(2)(b) - Bar under:
Held: Clause (b) of sub-section (2) of s.6 of the CGST Act and the
equivalent State enactments bars the "initiation of any proceedings"
on the "same subject matter". [Para 96(i)]
Central Goods and Service Tax Act, 2017 - Intelligence based
enforcement action - Parallel proceedings:
Held: Intelligence based enforcement action can be initiated by
any one of the Central or the State tax administrations despite the
taxpayer having been assigned to the other administration - Parallel
proceedings should not be initiated by other tax administration when
one of the tax administrations has already initiated intelligencebased enforcement action. [Para 96(iii), (iv)]
Central Goods and Service Tax Act, 2017 - s.6(2)(b) -
Proceedings:
Held: All actions that are initiated as a measure for probing an
inquiry or gathering of evidence or information do not constitute
"proceedings" within the meaning of s.6(2)(b) of the CGST Act.
[Para 96(v)]
* Author
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Supreme Court Reports
Central Goods and Service Tax Act, 2017 - s.6(2)(b) -
Expression "initiation of any proceedings":
Held: The expression "initiation of any proceedings" occurring
in s.6(2)(b) refers to the formal commencement of adjudicatory
proceedings by way of issuance of a show cause notice, and does
not encompass the issuance of summons, or the conduct of any
search, or seizure etc. [Para 96(vi)]
Central Goods and Service Tax Act, 2017 - Expression "subject
matter":
Held: The expression "subject matter" refers to any tax liability,
deficiency, or obligation arising from any particular contravention
which the Department seeks to assess or recover. [Para 96(vii)]
Central Goods and Service Tax Act, 2017 - s.6(2)(b) - When
the bar of Section 6(2)(b) would be immediately attracted:
Held: Where any two proceedings initiated by the Department
seek to assess or recover an identical or a partial overlap in the
tax liability, deficiency or obligation arising from any particular
contravention, the bar of s.6(2)(b) would be immediately attracted.
[Para 96(viii)]
Central Goods and Service Tax Act, 2017 - s.6(2)(b) - Distinct
infractions - Same subject matter:
Held: Where the proceedings concern distinct infractions, the
same would not constitute a "same subject matter" even if the tax
liability, deficiency, or obligation is same or similar, and the bar
under Section 6(2)(b) would not be attracted. [Para 96(ix)]
Central Goods and Service Tax Act, 2017 - ss.6(2)(b), 70 -
Scope and Ambit of "initiated any proceedings" u/s.6(2)(b) -
The Petitioner is a public limited company engaged in the
business of providing security services - On 18.11.2024,
petitioner received a show cause notice u/s.73 of the Act
from the respondent no.2, raising demand of Rs. 1,24,92,162/-
u/ss.50 and 74 of CGST Act, 2017 - Thereafter, two summons
dated 16.01.2025 and 23.01.2025 respectively were issued
by respondent no.1 to the petitioner directing one of the
directors of the petitioner to produce relevant documents -
Being aggrieved by the said summons the petitioner preferred
[2025] 8 S.C.R.
1729
M/s Armour Security (India) Ltd. v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
a writ petition before the High Court, on the ground that as
the respondent no. 2 had already made the investigation in
respect of the same issue and the respondent no. 1 does not
have the jurisdiction in view of s.6(2)(b) of the CGST Act -
Writ petition dismissed - High Court held that the expression
"any proceeding" in s.6(2)(b) cannot be construed to include
a search or investigation - The High Court fu

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[2025] 8 S.C.R. 1727 : 2025 INSC 982
M/s Armour Security (India) Ltd.
v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
(Special Leave Petition (C) No. 6092 of 2025)
14 August 2025
[J.B. Pardiwala* and R. Mahadevan, JJ.]
Issue for Consideration
The High Court dismissed the writ petition filed by the petitioner
herein, and declined from interdicting the summons dated
16.01.2025 and 23.01.2025 respectively, issued to the petitioner
u/s.70 of the Central Goods and Services Tax Act, 2017 (CGST
Act) by the Commissioner, Central Good and Services Tax, Delhi
East Commissionerate (respondent no.1).
Headnotes†
Central Goods and Service Tax Act, 2017 - s.6(2)(b) - Bar under:
Held: Clause (b) of sub-section (2) of s.6 of the CGST Act and the
equivalent State enactments bars the "initiation of any proceedings"
on the "same subject matter". [Para 96(i)]
Central Goods and Service Tax Act, 2017 - Intelligence based
enforcement action - Parallel proceedings:
Held: Intelligence based enforcement action can be initiated by
any one of the Central or the State tax administrations despite the
taxpayer having been assigned to the other administration - Parallel
proceedings should not be initiated by other tax administration when
one of the tax administrations has already initiated intelligencebased enforcement action. [Para 96(iii), (iv)]
Central Goods and Service Tax Act, 2017 - s.6(2)(b) -
Proceedings:
Held: All actions that are initiated as a measure for probing an
inquiry or gathering of evidence or information do not constitute
"proceedings" within the meaning of s.6(2)(b) of the CGST Act.
[Para 96(v)]
* Author
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Supreme Court Reports
Central Goods and Service Tax Act, 2017 - s.6(2)(b) -
Expression "initiation of any proceedings":
Held: The expression "initiation of any proceedings" occurring
in s.6(2)(b) refers to the formal commencement of adjudicatory
proceedings by way of issuance of a show cause notice, and does
not encompass the issuance of summons, or the conduct of any
search, or seizure etc. [Para 96(vi)]
Central Goods and Service Tax Act, 2017 - Expression "subject
matter":
Held: The expression "subject matter" refers to any tax liability,
deficiency, or obligation arising from any particular contravention
which the Department seeks to assess or recover. [Para 96(vii)]
Central Goods and Service Tax Act, 2017 - s.6(2)(b) - When
the bar of Section 6(2)(b) would be immediately attracted:
Held: Where any two proceedings initiated by the Department
seek to assess or recover an identical or a partial overlap in the
tax liability, deficiency or obligation arising from any particular
contravention, the bar of s.6(2)(b) would be immediately attracted.
[Para 96(viii)]
Central Goods and Service Tax Act, 2017 - s.6(2)(b) - Distinct
infractions - Same subject matter:
Held: Where the proceedings concern distinct infractions, the
same would not constitute a "same subject matter" even if the tax
liability, deficiency, or obligation is same or similar, and the bar
under Section 6(2)(b) would not be attracted. [Para 96(ix)]
Central Goods and Service Tax Act, 2017 - ss.6(2)(b), 70 -
Scope and Ambit of "initiated any proceedings" u/s.6(2)(b) -
The Petitioner is a public limited company engaged in the
business of providing security services - On 18.11.2024,
petitioner received a show cause notice u/s.73 of the Act
from the respondent no.2, raising demand of Rs. 1,24,92,162/-
u/ss.50 and 74 of CGST Act, 2017 - Thereafter, two summons
dated 16.01.2025 and 23.01.2025 respectively were issued
by respondent no.1 to the petitioner directing one of the
directors of the petitioner to produce relevant documents -
Being aggrieved by the said summons the petitioner preferred
[2025] 8 S.C.R.
1729
M/s Armour Security (India) Ltd. v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
a writ petition before the High Court, on the ground that as
the respondent no. 2 had already made the investigation in
respect of the same issue and the respondent no. 1 does not
have the jurisdiction in view of s.6(2)(b) of the CGST Act -
Writ petition dismissed - High Court held that the expression
"any proceeding" in s.6(2)(b) cannot be construed to include
a search or investigation - The High Court further held that a
summons or investigation pursuant to a search constitutes
only a precursor to the formal proceedings - Correctness:
Held: s.6(2)(b) of the CGST Act precludes a proper officer under
the CGST Act to initiate any proceedings on a subject matter if
a proper officer under the SGST or the UGST Act has initiated
any proceedings on the same subject matter - Further, s.70 of
the CGST Act empowers a proper officer to summon any person
whose presence is considered necessary for giving evidence
or producing documents or any other relevant material in an
inquiry - The issuance of summons is one of the instruments
employed by the Department to obtain information, documents,
or statements in cases involving suspected tax evasion - Such
summons may be issued to the person under investigation or to
a person considered a witness in investigation against another
person - The legislature has used the term "inquiry" in s.70, as
at the stage of issuing a summons, the Department is primarily
engaged in gathering information regarding a possible contravention
of law, which may subsequently form the basis for proceedings
against an assessee- At the stage of issuing a summons, the
Department is yet to determine whether proceedings should be
initiated against the assessee - Such evidence-gathering and
inquiry do not constitute "proceedings" within the meaning of s.6(2)
(b) of the CGST Act - The mere issuance of a summons cannot
be equated with proceedings barred under the Act, as the subject
matter cannot be ascertained solely through summons - In the
present case, the petitioner was served with a show cause notice
dated 18.11.2024 by the respondent no. 2 u/s.73 of the CGST Act,
thereby initiating proceedings - The petitioner has impugned the
summons dated 16.01.2025 and 23.01.2025 respectively issued by
the respondent no. 1 for production of documents - At the summons
stage, it cannot be predicted with certainty that the subject matter
of the proceedings will be identical; the mere presence of an
overlapping aspect under investigation does not ipso facto render
the subject matter "same" - The High Court correctly held that the
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term "any proceedings" does not encompass summons issued
pursuant to a search or investigation, as at the stage of issuance
of summons the Department is merely engaged in gathering
information - A case of search is clearly distinct and separate from
proceedings initiated only after issuance of a show cause notice.
[Paras 55, 56, 57, 58, 61, 62]
Central Goods and Service Tax Act, 2017 - Show cause notice
under GST regime:
Held: A show cause notice is a document served on a noticee,
requiring them to explain why a particular action should not be
initiated against them - Under the GST regime, issuance of a show
cause notice is a mandatory precondition for raising a demand -
It forms the bedrock for proceedings related to the recovery of
tax, interest, and penalty - The notice ensures adherence to the
principles of natural justice by granting the assessee an opportunity
to present their case before any adverse action is taken - In
essence, it serves as both a procedural safeguard and a legal
necessity, marking the commencement of quasi-judicial adjudication
under the Act. [Para 65]
Notice - Show cause notice - Whether a show cause notice
can be vagaue:
Held: A show cause notice sets the law in motion concerning
the liability under the statute, containing charges that a specific
person is called upon to answer - In other words, it sets out the
alleged violations of legal provisions and requires the assessee to
explain why the duty should not be recovered from them - Thus,
a show cause notice cannot be vague, nor can any allegations
be made without evidence being commensurate with the gravity
of the charges levelled against the noticee. [Para 66]
Central Goods and Service Tax Act, 2017 - s.67 and s.74 -
Whether the mere issuance of summons imply that the
Department has decided to proceed against the taxpayer for
recovery of liability:
Held: In the facts of the present case, the mere issuance of
summons does not imply that the Department has decided to
proceed against the taxpayer for recovery of liability - Therefore,
issuance of summons, by no stretch, can be considered as the
[2025] 8 S.C.R.
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M/s Armour Security (India) Ltd. v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
initiation of proceedings, since at that stage, the Department still
retains the discretion not to initiate any proceedings - A mere
contemplation or possibility of initiating action cannot be equated
with "proceedings", as doing so would undermine the framework
of cross-empowerment under the Act - Even when a discovery is
made during the search proceedings u/s.67 of the CGST Act, the
Department is required to bring such proceedings to a definitive
conclusion, either by issuing a show cause notice u/s.74 or by
dropping the matter altogether. [Para 74]
Central Goods and Service Tax Act, 2017 - Whether "subject
matter" within the meaning of s.6(2)(b) of the CGST Act includes
all matters dealt with in summons under the Act:
Held: It is abundantly clear from the purport of s.6(2)(b) of the
Act that "subject matter" needs to be understood in perspective of
initiation of proceedings - The proceedings stand initiated when a
show cause notice is issued with regard to a subject matter - It is
settled that the service of a show cause notice is made in order
to inform the noticee about the case that has been set up against
him, which he has to meet - Primacy is given to the cogency of a
show cause notice - The subject matter of the proceedings lies in
the contents of the notice - Hence, it ought to be exhaustive, so
much so that it is capable of presenting the case of the Revenue
in a nutshell - A show cause notice delineates the scope of the
proceedings in the expression of subject matter with which the
authority would be dealing - It would be impermissible for an
authority to invoke such rules, claims or grounds at a later stage
which do not figure in the show cause notice i.e, any ground,
reasoning or claim which does not figure out in the show cause
notice cannot be permitted to adversely affect the noticee - The
expression "subject matter" contemplates proceedings directed
towards determining the taxpayer's liability or contravention,
encompassing the alleged offence or non-compliance together with
the relief or demand sought by the Revenue, as articulated in the
show cause notice through its charges, grounds, and quantification
of demand - Accordingly, the bar on the "same subject matter" is
attracted only where both proceedings seek to assess or recover
an identical liability, or even where there is the slightest overlap
in the tax liability or obligation - In other words, u/s.6(2)(b), the
"subject matter" is intrinsically tied to the determination of the
specific violation under scrutiny or the liability alleged to be unpaid -
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The statutory bar is triggered only when the two proceedings
against the same taxpayer are, in substance, directed towards
the very same or overlapping deficiency in tax discharge or the
identical contravention alleged - Where the proceedings concern
distinct infractions, each Department is entitled to proceed within
its respective statutory remit without infringing the prohibition.
[Paras 82, 83, 84, 85, 86, 87]
Central Goods and Service Tax Act, 2017 - ss.6(2)(b) - A
twofold test to determine whether a subject matter is "same":
Held: First, the subject matter will be considered the same if an
authority has already proceeded on an identical liability of tax or
alleged offence by the assessee on the same facts; and secondly,
if the demand or relief sought is identical. [Para 88]
Central Goods and Service Tax Act, 2017 - s.6(2)(a) - Purpose
of:
Held: The provision serves a two fold purpose: first, to insulate
taxpayers from the prospect of being proceeded against by more
than one authority for the same subject matter; and secondly, to
vest in the officers functioning under the CGST Act, the SGST
Act, or the UTGST Act, to render a comprehensive order, thereby
avoiding multiplicity of proceedings - Such a construction is also in
consonance with the well-recognized principle of comity between
jurisdictions, which mandates that coordinate authorities must act
with mutual respect and due regard for each other's domain, so
as to preclude the possibility of conflicting determinations on the
same issue. [Para 93]
Central Goods and Service Tax Act, 2017 - s.6(2)(b) - What is
the purport of an "Order" u/s.6(2)(a) of the CGST Act:
Held: The expression 'order', qualified by the terms "under this
Act", occurring in the said provision admits of a broad construction,
so as to include every form of order which a proper officer is
competent to issue by virtue of the authority vested in them under
the statute - Such an interpretation is necessary to ensure that
the statutory mandate achieves its intended purpose of avoiding
multiplicity of proceedings and securing uniformity of adjudication
across the parallel enactments - Inasmuch as the CGST Act
vests the proper officer with authority to issue "orders" under
[2025] 8 S.C.R.
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M/s Armour Security (India) Ltd. v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
various provisions, it becomes imperative that such officer duly
apprises the jurisdictional counterpart of any action initiated by the
Department in relation to a taxable person who may otherwise fall
within the administrative domain of that officer - Given that the
statutory framework envisages a regime of cross-empowerment
amongst officers, the obligation so cast operates as a safeguard
against the prejudice which may arise from the initiation of parallel
or overlapping proceedings against the same taxpayer by different
wings of the Department. [Paras 94, 95]
Central Goods and Service Tax Act, 2017 - Guidelines - The
following guidelines to be followed in cases where, after the
commencement of an inquiry or investigation by one authority,
another inquiry or investigation on the same subject matter
is initiated by a different authority:
Held: a) Where a summons or a show cause notice is issued by
either the Central or the State tax authority to an assessee, the
assessee is, in the first instance, obliged to comply by appearing and
furnishing the requisite response, as the case may be - Because,
mere issuance of a summons does not enable either the issuing
authority or the recipient to ascertain that proceedings have been
initiated; b) Where an assessee becomes aware that the matter
being inquired into or investigated is already the subject of an inquiry
or investigation by another authority, the assessee shall forthwith
inform, in writing, the authority that has initiated the subsequent
inquiry or investigation; c) Upon receipt of such intimation from
the assessee, the respective tax authorities shall communicate
with each other to verify the veracity of the assessee's claim - so
as this course of action would obviate needless duplication of
proceedings; d) If the claim of the taxable person regarding the
overlap of inquiries is found untenable, and the investigations
of the two authorities pertain to different "subject matters", an
intimation to this effect, along with the reasons and a specification
of the distinct subject matters, shall be immediately conveyed in
writing to the taxable person; e) The taxing authorities are well
within their rights to conduct an inquiry or investigation until it
is ascertained that both authorities are examining the identical
liability to be discharged, the same contravention alleged, or the
issuance of a show cause notice; f) However, if the Central or the
State tax authority, as the case may be finds that the matter being
inquired into or investigated by it is already the subject of inquiry
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Supreme Court Reports
or investigation by another authority, both authorities shall decide
inter-se which of them shall continue with the inquiry or investigation;
g) However, where the authorities are unable to reach a decision
as to which of them shall continue with the inquiry or investigation,
then in such circumstances, the authority that first initiated the
inquiry or investigation shall be empowered to carry it to its logical
conclusion, and the courts in such a case would be competent to
pass an order for transferring the inquiry or investigation to that
authority; h) If it is found that the authorities are not complying with
these aforementioned guidelines, it shall be open to the taxable
person to file a writ petition before the concerned High Court u/
Art.226 of the Constitution of India; i) At the same time, taxable
persons shall ensure complete cooperation with the authorities -
It is incumbent upon them to appear in response to a summons
and/or reply to a notice. [Para 97]
Central Goods and Service Tax Act, 2017 - s.6 - Framework
of single interface and cross-empowerment:
Held: The unique scheme and framework of the Goods and
Services Tax regime envisages two distinct concepts at its heart,
the concept of a "single interface" as-well as the concept of
"cross-empowerment" - The former relates to doing away of dual
administrative control over the collection as-well as assessment
of tax returns by tax payers, that had existed previously, in the
erstwhile scheme of indirect taxes in the form of value added
tax or VAT - Whereas, the latter, pertains empowering both the
Central and State tax administrations to simultaneously undertake
enforcement actions against a tax-payer - The underlying objective
of this arrangement was to simplify the taxpayer's engagement with
the tax system by ensuring that all notices, audits, assessments,
and other proceedings are handled by a single authority, thereby
eliminating the complexity and duplication that would arise from
dual control - It was envisioned that a taxpayer should not be
compelled to respond to two different authorities for the same issue
or transaction - S. 6 of the CGST Act and the identical pari-materia
provision in the respective State and Union Territories statutes, is a
nuanced provision that enshrines both the concept as-well as the
contours of "single interface" system and "cross-empowerment" -
It delineates when and how the various officers appointed under
different corresponding legislations shall act as "proper officer" for
the purposes of the said legislation. [Paras 34, 37, 42]
[2025] 8 S.C.R.
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M/s Armour Security (India) Ltd. v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
Case Law Cited
Gorkha Security Services v. Govt. (NCT of Delhi) [2014] 13 SCR
617 : (2014) 9 SCC 105; The Commissioner of Central Excise,
Bhubaneswar-I v. Champdany Industries Limited [2009] 14 SCR
211 : (2009) 9 SCC 466 - relied on.
G.K. Trading v. Union of India & Ors., 2020 SCC OnLine All
1907; K.T. Saidalavi v. State Tax Officer, 2024 SCC OnLine Ker
5674 - affirmed.
Kuppan Gounder P.G. Natarajan v. Directorate General of GST
Intelligence, 2021 SCC OnLine Mad 17053; Anurag Suri v.
Director General of Goods and Services Tax Intelligence & Ors.,
2021 SCC OnLine Ori 2510; Indo International Tobacco Ltd. v.
Vivek Prasad, 2022 SCC OnLine Del 90; Rais Khan v. Add.
Commissioner, Enforcement, Wing-II, D.B. Civil Writ Petition
No. 3087/2024; M/s. R.P. Buildcon Pvt. Ltd. v. Superintendent,
CGST & CX, Circle-II, Group-10, 2022 SCC OnLine Cal 3108;
Tvl. Metal Trade Incorporation v. Special Secretary, Head of the
GST Council Secretariat, New Delhi, 2023 SCC OnLine Mad 8234;
Stalwart Alloys India Pvt. Ltd. v. Union of India & Ors., 2024 SCC
OnLine P&H 15153; Kundlas Loh Udyog v. State of H.P., 2024
SCC OnLine HP 4810; Amit Gupta v. Union of India, 2023 SCC
OnLine Del 6664; Satyam Castings Pvt. Ltd. v. Deputy Director,
DGGI, Bhubaneshwar, 2024 SCC OnLine Ori 1624 - referred to.
Books and Periodicals Cited
Guidelines on Issuance of Summons under Section 70 of the
CGST Act issued by the Central Board of Indirect Taxes & Customs
(GST - Investigation Wing) dated 17.08.2022; P. Ramanatha
Aiyar's, 6th Editionpage 4415-4420; Black's Law Dictionary, 4th
Edition, page 1368 - referred to.
List of Acts
Central Goods and Service Tax Act, 2017.
List of Keywords
Bar unders. 6(2)(b) of Central Goods and Service Tax Act, 2017;
Clause (b) of sub-section (2) of s.6 of the Central Goods and Service
Tax Act, 2017; Intelligence based enforcement action; Parallel
proceedings; Show cause notice; Initiation of any proceedings;
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Supreme Court Reports
Subject matter; Tax liability; Recovery of liability; Order; Proper
officer; Multiplicity of proceedings; Determination of whether the
subject matter is same; Subject matter within the meaning of Section
6(2)(b) of Central Goods and Service Tax Act, 2017; Summons;
Concept of cross-empowerment; Same subject matter; Framework
of single interface and Cross-empowerment; Proceedings within
the meaning of Section 6(2)(b) of the CGST Act.
Case Arising From
CIVIL APPELLATE JURISDICTION: Special Leave Petition (C)
No. 6092 of 2025
From the Judgment and Order dated 07.02.2025 of the High Court
of Delhi at New Delhi in WP(C) No. 1082 of 2025
Appearances for Parties
Advs. for the Petitioner:
Sridhar Potaraju, Sr. Adv., Srinivas Kotni, Rishabh Dev Dixit, Rohit
Dutta, Gaichangpou Gangmei, Akshay Kumar, Aayush, Lalit Mohan,
Ms. Niharika Singh, Sai Swaroop, Gurdeep Singh.
Judgment / Order of the Supreme Court
Judgment
J.B. Pardiwala, J.
For the convenience of exposition, this judgment is divided into the
following parts:-
INDEX*
A.
FACTUAL MATRIX .........................................................
2
B.
IMPUGNED ORDER ........................................................
4
C.
SUBMISSIONS ON BEHALF OF THE PETITIONER .....
5
D.
ANALYSIS ........................................................................
9
I.
Whether issuance of summons can be regarded
as "initiation of proceedings" within the meaning
of Section 6(2)(b) of the CGST Act? ......................
9
* Ed. Note: Pagination as per the original Judgment.
[2025] 8 S.C.R.
1737
M/s Armour Security (India) Ltd. v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
a. Contrary Views of different High Courts on the
issue.....................................................................
9
i.
Decisions interpreting the contours of
"proceedings" in contrast to "inquiry" or
investigation ................................................... 10
ii. Decisions interpreting "proceedings" in
association to "inquiry" or investigation ......... 21
b. Framework of single interface and crossempowerment of powers under Section 6 of the
CGST Act ............................................................. 30
c. Scope and Ambit of "initiated any proceedings"
under Section 6(2)(b) of the CGST Act ............... 42
i.
Reading of Circular dated 05.10.2018 .......... 50
II. Whether "subject matter" within the meaning of
Section 6(2)(b) of the CGST Act includes all matters
dealt with in summons under the Act? ................. 52
III. What is the purport of an "Order" under Section
6(2)(a) of the CGST Act? ......................................... 59
E.
CONCLUSION .................................................................. 61
1.
This matter was notified for admission on 06.03.2025. After hearing
the learned Counsel appearing for the petitioner at length, and upon
a threadbare examination of the reasoning assigned by the High
Court, we decided to dismiss the Special Leave Petition. However,
considering the nature of the issue involved, we thought it appropriate
to assign reasons, and accordingly reserved the order.
2.
This petition arises from the judgment and order passed by the
High Court of Delhi dated 07.02.2025 in W.P.(C) No. 1082 of 2025
("Impugned Order"), by which the High Court dismissed the writ
petition filed by the petitioner herein, and declined from interdicting the
summons dated 16.01.2025 and 23.01.2025 respectively, issued to the
petitioner under Section 70 of the Central Goods and Services Tax Act,
2017 (for short, "the CGST Act") by the Commissioner, Central Good
and Services Tax, Delhi East Commissionerate (respondent no. 1).
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A.
FACTUAL MATRIX
3.
The petitioner is a public limited company, incorporated under the
Companies Act, 2013 and is registered with the Delhi GST authorities
vide GSTIN: 07AADCA5862E2ZS. The company is engaged, inter
alia, in the business of providing security services.
4.
On 18.11.2024, the petitioner received a show cause notice issued
under Section 73 of the CGST Act from the respondent no. 2 for
tax period April 2020-March 2021. The show cause notice raised
a demand of Rs. 1,24,92,162/- (aggregate of CGST, SGST, IGST)
alongwith the applicable interest and penalty under Sections 50 and
74 of the CGST Act respectively. The said show cause notice was
served on the ground that - (i) net tax under declared due to nonreconciliation of turnovers in other returns and e-way bill information;
(ii) excess claim of ITC.
5.
On 16.01.2025, a search was conducted at the registered premises
of the petitioner under Section 67(2) of the CGST Act by the officers
of respondent no. 1. A panchnama was drawn seizing electronic
gadgets and documents. Thereafter, summons under Section 70 of
the CGST Act was issued to four directors of the petitioner company
requiring them to produce documents.
6.
On 23.01.2025, the petitioner received one another summons under
Section 70 of the CGST Act issued by the officer of respondent no. 1,
directing one of the directors of the petitioner to produce relevant
documents. The petitioner vide letter dated 24.01.2025 submitted a
letter addressed to the respondent no. 1 stating that the petitioner
is being investigated by the respondent no. 2, on similar grounds,
including ITC claimed from cancelled suppliers. The petitioner also
sought release of the seized electronic devices and documents.
7.
Aggrieved by the summons dated 16.01.2025 and 23.01.2025
respectively, the petitioner preferred a writ petition before the High
Court of Delhi on the ground that as the respondent no. 2 had
already made the investigation in respect of the same issue and the
respondent no. 1 does not have the jurisdiction in view of Section
6(2)(b) of the CGST Act.
B.
IMPUGNED ORDER
[2025] 8 S.C.R.
1739
M/s Armour Security (India) Ltd. v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
8.
The High Court dismissed the writ petition preferred by the petitioner
and thereby declined to interfere with the summons issued to the
petitioner on 16.01.2025 and 23.01.2025 respectively. The Court
held that the expression "any proceeding" in Section 6(2)(b) cannot
be construed to include a search or investigation. The High Court
took the view that a summons or investigation pursuant to a search
constitutes only a precursor to the formal proceedings. It distinguished
such summons from assessment, noting that summons is primarily
intended to elicit information.
9.
The High Court noted that the intent of the statute is to prevent
parallel proceedings relating to assessment, particularly those
initiated under Sections 73 and 74 respectively of the CGST Act or
any other analogous provisions. At the stage of issuing summons,
the authorities are merely engaged in gathering information from
the assessee based on the material collected thus far, as it is not
yet possible to determine the specific course of action the authority
intends to pursue.
10. Lastly, the High Court considered the decision of the High Court of
Jharkhand in Vivek Narsaria v. State of Jharkhand, reported in
2024 SCC OnLine Jhar 50, which was relied upon by the petitioner
to fortify his submissions. The Court held that the facts of the said
case were distinguishable from those of the present matter. In Vivek
Narsaria (supra), both the State and Central GST authorities were
conducting parallel inquiries, requiring the assessee to reverse the
input tax credit. The Court observed that the search in the present
case could not be construed as related to prior assessments or
the pending proceedings, as it was conducted subsequent to those
events.
C.
SUBMISSIONS ON BEHALF OF THE PETITIONER
11. Mr. Sridhar Potaraju, the learned Senior Counsel appearing for the
petitioner, would argue that Section 6(2)(b) of the CGST Act expressly
prohibits parallel proceedings on the same subject matter by both
the State and the Central GST authorities. He submitted that the
summons issued by the respondent no. 1 concerning the subject
matter i.e., availability of input tax credit in respect of cancelled
dealers is barred under Section 6(2)(b), as the respondent no. 2
had already issued show cause notices on the same subject matter.
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[2025] 8 S.C.R.
Supreme Court Reports
12. Mr. Potaraju submitted that the petitioner does not dispute the
jurisdiction and authority of the Central GST authorities in respect
of subject matters not covered by the show cause notices issued
by the State authority. He further contended that the High Court
erred in interpreting Section 6(2)(b) as being limited to proceedings
under Sections 73 and 74 respectively, or other similar provisions.
Consequently, the High Court erroneously held that the statutory
bar under Section 6(2)(b) does not apply to summons issued under
Section 70 of the CGST Act.
13. Mr. Potaraju drew the Court's attention to Section 146 of the CGST
Act to submit that that the common GST portal reflects complete
records and status of all proceedings initiated by either the State or
Central GST authorities. Accordingly, both the authorities are privy
to any proceedings on any given subject matter. In the present
case, the summons issued by the respondent no. 1 clearly specify
the subject matter, which is evidently identical to that already under
consideration of the respondent no. 2.
14. Further advancing his submission, Mr. Potaraju underscored the
importance of harmony as a foundational principle of cooperative
federalism, upon which the GST regime is structured. He submitted
that once either the State or Central authority initiates proceedings,
the other is expected to act in aid of those proceedings and provide
all necessary inputs to ensure their effective culmination. However,
the simultaneous exercise of jurisdiction in the form of a parallel
investigation on the same subject matter, he argued, runs contrary
to the principle of harmony.
15. Mr. Potaraju relied upon D.O. F.No. CBEC/20/43/01/2017-GST (Pt.)
dated 05.10.2018, issued by the Central Board of Excise & Customs,
Ministry of Finance, to fortify his submission that the mandate of
Section 6 of the CGST Act envisages a harmonious exercise of
powers by the State and Union authorities. The Circular reads thus;
"Dear Colleague,
It has been brought to the notice of the Board that there
is ambiguity regarding initiation of enforcement action by
the Central tax officers in case of taxpayer assigned to
the State tax authority and vice versa.
[2025] 8 S.C.R.
1741
M/s Armour Security (India) Ltd. v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
2. In this regard, GST Council in its 9th meeting held on
16.01.2017 had discussed and made recommendations
regarding administrative division of taxpayers and
concomitant issues. The recommendation in relation to
cross-empowerment of both tax authorities for enforcement
of intelligence based action is recorded at para 28 of
Agenda note no. 3 in the minutes of the meeting which
reads as follows:-
"viii. Both the Central and State tax administrations shall
have the power to take intelligence-based enforcement
action in respect of the entire value chain"
3. It is accordingly clarified that the officers of both Central
tax and State tax are authorized to initiate intelligence
based enforcement action on the entire taxpayer's base
irrespective of the administrative assignment of the
taxpayer to any authority. The authority which initiates
such action is empowered to complete the entire process
of investigation, issuance of SCN, adjudication, recovery,
filing of appeal etc. arising out of such action.
4. In other words, if an officer of the Central tax authority
initiates intelligence based enforcement action against a
taxpayer administratively assigned to State tax authority,
the officers of Central tax authority would not transfer the
said case to its State tax counterpart and would themselves
take the case. to its logical conclusions.
5. Similar position would remain in case of intelligence
based enforcement action initiated by officers of State tax
authorities against a taxpayer administratively assigned to
the Central tax authority.
6. It is also informed that GSTN is already making changes
in the IT system in this regard."
16. By relying on the decision in the Chief Commissioner of Central
Goods and Service Tax v. Safari Retreats Pvt. Ltd., reported in
(2025) 2 SCC 523, Mr. Potaraju further submitted that the CGST Act
is a special statute and constitutes a self-contained code. As such,
its provisions must be interpreted in a literal, plain, and strict manner.
A literal reading of Section 6(2)(b), he argued, clearly envisages a
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Supreme Court Reports
bar on the initiation of any proceedings by a proper officer under
the CGST Act on the same subject matter where proceedings have
already been initiated by a proper officer under the SGST Act.
17. Mr. Potaraju submitted that the legislature has consciously
employed the phrase "any proceedings", which, in his view, is
intended to encompass all proceedings initiated under the relevant
GST enactment. The use of the word "any" in conjunction with
"proceedings" reflects the legislative intent to give the provision a
broad and inclusive scope. To buttress this submission, he relied on
the decision in K.P. Mohammed Salim v. CIT, reported in (2008)
11 SCC 573. Furthermore, Section 6 of the CGST Act, is part of
Chapter II of the Act which deals with Administration. As a sequitur,
it ought to apply to all the "proceedings" contemplated under the
subsequent provisions.
18. Lastly, Mr. Potaraju emphasized that officers under the GST regime
are governed by the provisions set out in Chapter II of the CGST Act.
He pointed out that the term "proper officer," as defined in Section
2(91) of Chapter I, refers to any officer assigned with any function
under the Act. The CGST Act, he argued, does not draw distinctions
or impose limitations on the exercise of powers by a proper officer.
Rather, the definition operates as an overarching provision, uniformly
applicable across the various Chapters of the Act.
19. In such circumstance referred to above, he prayed that there being
merit in the present appeal, the same may be allowed and the
Impugned Order passed by the High Court may be set aside and
the summons dated 16.01.2025 and 23.01.2025 respectively be
declared as having been issued without jurisdiction.
D.
ANALYSIS
20. Having heard the learned Counsel appearing for the petitioner and
having gone through the materials on record, the only question that
falls for our consideration is whether the action of respondent no.
1, as complained of, amounts to an "initiation of proceedings" in
respect of the "same subject matter" for the purposes of Section
6(2)(b) of the CGST Act.
I.
Whether issuance of summons can be regarded as
"initiation of proceedings" within the meaning of Section
6(2)(b) of the CGST Act?
[2025] 8 S.C.R.
1743
M/s Armour Security (India) Ltd. v.
Commissioner, CGST, Delhi East Commissionerate & Anr.
21. One of the principal contentions raised by the petitioner herein for
the purpose of assailing the Impugned Order is that the issuance of
summons amounts to "initiation of proceedings" within the meaning
of Section 6(2)(b) of the CGST Act.
a.
Contrary Views of different High Courts on the issue
22. Before we proceed to answer the aforesaid contention canvassed
on behalf of the petitioner, it would be appropriate to first refer to the
decisions of various High Courts and the cleavage of opinion that have
been expressed as regards the scope of "initiation of proceedings"
within the meaning of Section 6 of the CGST Act.
i.
Decisions interpreting the contours of "proceedings" in
contrast to "inquiry" or investigation
23. The High Court of Allahabad in G.K. Trading v. Union of India
& Ors., reported in 2020 SCC OnLine All 1907, examined the
interplay between Sections 6 and 70 respectively of the CGST Act.
The petitioner had received summons from the State GST authorities
to explain two instances of availed input tax credit. Simultaneously,
the petitioner was also summoned by the Central GST authorities to
tender a statement in connection with the inquiry being undertaken
by the Central GST authorities. Subsequent summons required the
petitioner to produce various documents; however, he failed to furnish
the requisite information.
The High Court held that the term "inquiry" as used in Section 70 of
the CGST Act is not synonymous with "proceedings" under Section
6(2)(b). The Court clarified that proceedings under Section 6(2)(b)
include actions relating to assessment, demand, and penalty, such
as those initiated under Sections 73 or 74 respectively of the Act.
Moreover, the Court interpreted the phrase "same subject matter"
in Section 6(2)(b) to refer to the same cause of action concerning
the same dispute being adjudicated before a proper officer. In the
Court's view, the reference to "subject matter" implies an adjudicatory
proceeding founded on an identical cause of action. The relevant
observations read as under:
"10. The words "subject-matter", "proceedings" and "inquiry"
have not been defined either under the State GST Act or
the Union Territory GST Act or the CGST Act. Therefore,
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[2025] 8 S.C.R.
Supreme Court Reports
these words have to be interpreted in the context of the
aforesaid Acts. The word "inquiry" in section 70 has a
special connotation and a specific purpose to summon any
person whose attendance may be considered necessary
by the proper officer either to give evidence or to produce
a document or any other thing. It cannot be intermixed
with some statutory steps which may precede or may
ensue upon the making of the inquiry or conclusion of
inquiry. The process of inquiry under section 70 is specific
and unified by the very purpose for which provisions of
Chapter XIV of the Act confers power upon the proper
officer to hold inquiry. The word "inquiry" in section 70 is
not synonymous with the word "proceedings", in section
6(2)(b) of the UPGST Act/CGST Act.
xxx
12. Provisions of section 70 has been enacted for collecting
evidence in matters involving tax evasion which may also
lead to confiscation. After inquiry is completed and materials
for tax not paid or short-paid or erroneously refunded or
input-tax credit wrongly availed or utilized, by reason of
fraud or wilful misstatement or suppression of facts or
otherwise are found, then it may lead to demands and
recovery under section 73 or section 74, as the case may
be. When action for assessment, demand and penalty, etc.,
including action under section 73 or 74 is taken, that shall
amount to proceedings referable to section 6(2)(b) of the
Act but the inquiry under section 70 is not a proceeding
referable to section 6(2)(b) of the Act.
xxx
17.