The Goods and Services Tax (GST) regime, implemented through the Central Goods and Services Tax Act, 2017 (CGST Act) and corresponding State GST laws, was designed to eliminate multiple layers of indirect taxation, simplify compliance, and ensure a uniform national market. One of its central administrative objectives is the single interface principle — ensuring that a taxpayer interacts primarily with one tax authority (Central or State) for any given matter.
However, the GST law also empowers both Central and State authorities to conduct enforcement activities under a principle called cross-empowerment. This balance between single interface and cross-empowerment raises a key question: Can different wings of the same GST department (e.g., audit, anti-evasion, intelligence) initiate separate proceedings for the same taxpayer, period, and subject matter?
The recent Supreme Court judgment in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate & Anr. (2025) and earlier High Court decisions provide critical guidance on this issue, particularly through the interpretation of Section 6(2)(b) of the CGST Act.
Statutory Framework
1. Section 6(2)(b) of the CGST Act
This provision states:
Where a proper officer under the State GST Act or the Union Territory GST Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.
The equivalent restriction applies in reverse — i.e., if a proper officer under the CGST Act initiates proceedings, the State GST officer cannot start separate proceedings on the same subject matter.
2. The “Subject Matter” Test
The key phrases are “any proceedings” and “same subject matter”. Courts have consistently held that the subject matter refers to the nature of proceedings — for example, wrongful availment of Input Tax Credit (ITC) in a given tax period — not merely the identical facts or documents.
3. Single Interface and Cross-Empowerment
While taxpayers are administratively assigned to either the Central or State GST authority, both sets of officers are empowered to act under the other’s law (cross-empowerment). The challenge arises when this leads to parallel proceedings for the same cause, particularly within different wings of the same department.
Facts of the Case
Petitioner: M/S Armour Security (India) Ltd., a public limited company providing security services, registered under Delhi GST (GSTIN: 07AADCA5862E2ZS).
First action: On 18 November 2024, the State GST authority (Respondent No. 2) issued a show cause notice under Section 73 for April 2020–March 2021, alleging under-declared turnover and excess input tax credit (ITC) claims.
Second action: On 16 January 2025, Central GST Delhi East Commissionerate (Respondent No. 1) conducted a search under Section 67(2), seizing devices and documents, followed by summons to directors under Section 70.
Third action: On 23 January 2025, another summons from Respondent No. 1 sought documents on alleged ITC claims from cancelled suppliers.
Petitioner’s objection: Cited Section 6(2)(b) — claimed that since the SGST officer had already initiated proceedings on the same subject matter (ITC from cancelled dealers), the CGST officer was barred from starting a parallel process.
Delhi High Court’s View
The High Court dismissed the writ petition, holding:
- “Proceedings” ≠ “inquiry” or “investigation” — summons or search are preliminary steps, not “proceedings” under Section 6(2)(b).
- The bar in Section 6(2)(b) aims at preventing parallel adjudicatory proceedings (e.g., under Sections 73/74), not preliminary inquiries.
- Summons merely elicit information; they are not equivalent to an assessment or demand process.
- Relied on the Allahabad High Court’s view in G.K. Trading (2020) that Section 70 inquiries are distinct from proceedings under Section 6(2)(b).
Supreme Court’s Analysis in Armour Security Case
In M/s Armour Security (India) Ltd. (SLP(C) No. 6092 of 2025), the petitioner argued that once a proceeding (under Section 73) was initiated by one GST wing for a tax period, another wing could not start a separate investigation on the same subject matter.
The Court considered:
Whether summons under Section 70 amount to “initiation of proceedings” under Section 6(2)(b)
- The Court noted a judicial consensus that inquiry (via summons, searches) and proceedings (assessment, adjudication under Sections 73/74) are distinct.
- Summons are preliminary, aimed at gathering evidence; they do not, by themselves, trigger the bar under Section 6(2)(b).
Parallel proceedings by different wings
- While preliminary inquiries may be conducted by different wings, formal proceedings on the same subject matter for the same period cannot run in parallel.
- The “single interface” principle prevents duplication and conflicting determinations.
Applicability to same-department scenarios
- The Court recognised that Section 6(2)(b) also applies where different wings of the same department are involved — e.g., Anti-Evasion and Audit wings of the Central GST.
- This view is reinforced by the Calcutta High Court in R.P. Buildcon Pvt. Ltd. where audit under Section 65 was already ongoing, and Anti-Evasion was restrained from initiating a separate proceeding for the same period.
Key High Court Precedents
1. Calcutta High Court – M/s R.P. Buildcon Pvt. Ltd. v. Superintendent, CGST & CX, Circle-II, 2022 SCC OnLine Cal 3108
Facts: Audit under Section 65 by one CGST wing; Anti-Evasion and Range Office initiated scrutiny for the same years.
Held: Audit is a “proceeding” under Section 6(2)(b). Once started, other wings must not initiate separate proceedings for the same period.
2. Punjab & Haryana High Court – Stalwart Alloys India Pvt. Ltd. v. Union of India & Ors., 2024 SCC OnLine P&H 15153
Held: “Subject matter” means the nature of the proceedings. If the State initiated proceedings for fraudulent ITC availment, DGGI (Central) cannot initiate similar proceedings for a different sub-period within the same larger period.
3. Himachal Pradesh High Court – Kundlas Loh Udyog v. State of H.P., 2024 SCC OnLine HP 4810
Held: New information by another wing should be shared with the authority already seized of the matter, not used to start fresh proceedings.
Principles Emerging from Case Law
From the Supreme Court and multiple High Courts, the following guiding principles emerge:
Distinction between Inquiry and Proceedings
- Inquiry (search, summons under Section 70) is not the same as proceedings under Section 6(2)(b).
- The bar under Section 6(2)(b) applies to adjudicatory steps like show-cause notices, assessments, and audits.
Same-Department Application
- Section 6(2)(b) is not confined to Centre-vs-State scenarios; it also applies when two wings of the same GST department act on the same subject matter and tax period.
Subject Matter Defined by Nature of Proceedings
- It is the type of alleged contravention (e.g., wrongful ITC claim for FY 2020-21) that defines the “same subject matter.”
Single Interface Principle
- Only one authority should take proceedings on a given subject matter; other wings should support, not duplicate.
Intelligence-Based Actions
- Cross-empowerment permits initiation by either Central or State officers, but once initiated, others must not start parallel proceedings.
Key Highlights of the Decision:
Justice J.B. Pardiwala and Justice R. Mahadevan stated:
We issue 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.
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. We say, so 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. We say, so as this course of action would obviate needless duplication of proceedings and ensure optimal utilization of the Department’s time, effort, and resources, bearing in mind that action initiated by one authority enures to benefit of all.
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.
Practical Implications for Taxpayers and Authorities
A. For Taxpayers
- If already facing proceedings for a specific issue and period, taxpayers can object to fresh proceedings by another wing for the same matter, citing Section 6(2)(b) and relevant judgments.
- However, they cannot refuse to comply with summons or inquiries, as these are not “proceedings” within the statutory bar.
B. For GST Authorities
- Must coordinate internally to avoid duplication.
- New intelligence should be shared with the wing already seized of the matter.
- If another wing’s action is necessary (e.g., for a different subject matter or period), ensure clear demarcation in notices.
Policy Perspective
The ruling strikes a balance between enforcement efficiency and taxpayer protection:
- Prevents misuse of Section 6(2)(b) to obstruct preliminary investigations.
- Retains the safeguard against harassment through duplicate adjudication.
- Reinforces the GST Council’s design of a single interface without undermining cross-empowerment.
However, without clear legislative definition of “proceedings” in Section 6(2)(b), litigation will likely continue where authorities overlap in both fact and cause of action.
Conclusion
The Supreme Court in M/S Armour Security has clarified that different wings of the same GST department can initiate separate inquiries for the same tax period, as long as they do not both initiate adjudicatory proceedings on the same subject matter.
For Section 6(2)(b) to apply, there must be:
- A prior initiation of formal proceedings (e.g., SCN under Sections 73/74) by one authority, and
- An identical subject matter in nature and cause of action.
This interpretation preserves both taxpayer convenience and administrative effectiveness, upholding the cooperative federalism model envisioned in GST.