Delhi High Court holds that objections to parallel State GST and DGGI proceedings under Section 6(2)(b) of the CGST Act can be raised before the statutory appellate authority.
Case: Saraswati Printers v. Directorate General of GST Intelligence, DZU & Ors.
Case No.: W.P.(C) 833/2025
Citation: 2026 LLBiz HC (DEL) 985
Court: Delhi High Court
Bench: Justice Anil Kshetarpal and Justice Shail Jain
Introduction
The Delhi High Court has reiterated the importance of the statutory appellate mechanism under the Goods and Services Tax (GST) law while dealing with a challenge against proceedings initiated by the Directorate General of GST Intelligence (DGGI). The Court held that an objection alleging parallel proceedings by State GST authorities and the DGGI, based on Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act), can be raised before the statutory appellate authority.
The ruling is significant for taxpayers facing investigations or demands from different GST authorities concerning alleged wrongful availment or utilisation of Input Tax Credit (ITC). The Court declined to examine the factual question of whether the State GST and DGGI proceedings actually related to the same subject matter in writ jurisdiction, particularly after an adjudication order had already been passed.
Background of the Case
The petitioner approached the Delhi High Court challenging proceedings initiated by the DGGI under Section 74 of the CGST Act. The dispute concerned an alleged wrongful availment and utilisation of ITC.
The petitioner contended that State GST authorities had already initiated proceedings for Financial Years 2017-18, 2018-19 and 2019-20 concerning alleged irregular ITC availed from cancelled or non-existent suppliers. According to the petitioner, the subsequent DGGI investigation substantially overlapped with those proceedings.
The DGGI proceedings covered the period from July 2017 to March 2024, and the petitioner argued that initiating another proceeding on substantially the same issue was contrary to Section 6(2)(b) of the CGST Act.
Section 6(2)(b) essentially restricts initiation of proceedings by a Central tax authority on a subject matter on which proceedings have already been initiated by a State tax authority, and vice versa, subject to the statutory framework.
DGGI’s Stand
The DGGI disputed the petitioner’s allegation that both proceedings concerned the same subject matter.
According to the DGGI, its investigation had commenced in December 2020 and included searches at the petitioner’s premises. The investigation allegedly revealed fraudulent availment and utilisation of ITC based on invoices issued by bogus or non-existent suppliers without actual movement or supply of goods.
The Department therefore maintained that its proceedings were based upon a distinct investigation and factual foundation. It also differentiated the DGGI investigation from the State GST proceedings, which were stated to have arisen from return-based discrepancies and other instances of allegedly ineligible ITC.
Adjudication Order Changes the Legal Position
An important development occurred while the writ petition was pending.
The petition had originally been filed in January 2025 against the DGGI’s show cause notice. During the pendency of the proceedings, however, the competent adjudicating authority passed an order confirming an ITC demand of ₹5,71,00,237, along with applicable interest and penalty under Section 74 of the CGST Act.
The Delhi High Court observed that this development materially changed the position because the dispute was no longer limited to a challenge against a show cause notice. A final adjudication order had already determined the petitioner’s tax liability.
Consequently, the petitioner had an available statutory remedy of appeal under Section 107 of the CGST Act.
Delhi High Court’s Findings
The Division Bench declined to examine the petitioner’s Section 6(2)(b) objection in writ proceedings.
The Court observed that determining whether the State GST proceedings and DGGI proceedings involved the “same subject matter” would require a detailed factual examination.
This would include comparison of the nature and scope of the two proceedings, the transactions involved, the particular ITC claims, the alleged liabilities, the factual circumstances and the material relied upon by the respective authorities.
According to the Court, such an examination was more appropriately undertaken by the statutory appellate authority rather than in writ jurisdiction under Article 226 of the Constitution.
The Court therefore held that the petitioner’s objection under Section 6(2)(b) was a legitimate ground that could be urged before the competent appellate authority.
Significance for GST Taxpayers
The judgment provides an important procedural lesson for taxpayers facing multiple GST proceedings.
A taxpayer who believes that State GST authorities have already initiated proceedings concerning the same subject matter should carefully compare the scope and factual basis of both proceedings. Mere similarity in the GST registration, financial years or broad issue of ITC may not by itself establish that the proceedings concern the same subject matter.
At the same time, the Court has not ruled that a taxpayer can never invoke Section 6(2)(b) where parallel proceedings exist. Instead, it has clarified that such an objection can be placed before the statutory appellate authority, particularly where an appealable adjudication order has already been passed.
The decision therefore highlights the importance of presenting a detailed factual comparison in the appeal, including the tax periods involved, invoices, suppliers, ITC amounts, allegations, statutory provisions invoked and demands raised.
Conclusion
The Delhi High Court in Saraswati Printers v. DGGI has emphasised the role of the statutory appellate mechanism under GST. Where an adjudication order has already been passed, challenges involving factual examination of overlapping State GST and DGGI proceedings should ordinarily be pursued through the remedy available under Section 107 of the CGST Act.
For taxpayers alleging parallel GST proceedings, Section 6(2)(b) remains an important statutory objection. However, establishing that two proceedings concern the “same subject matter” requires careful examination of their factual and legal foundations.
The ruling is therefore relevant to businesses, tax professionals and GST litigants dealing with DGGI investigations, ITC disputes, Section 74 proceedings and alleged duplication of proceedings by Central and State GST authorities.