The Himachal Pradesh High Court examined whether simultaneous proceedings by Central GST and State GST authorities on the same subject matter are legally permissible. The Court held that parallel proceedings are not per se invalid, provided both authorities coordinate their actions to avoid duplication and harassment of the assessee.
Facts of the Case
- The State GST Authority issued summons to the assessee under the GST law.
- Simultaneously, the Central GST Authority issued a show cause notice (SCN) covering the same subject matter.
- The assessee challenged the proceedings, alleging multiplicity of actions and lack of jurisdictional clarity between Central and State authorities.
Issues for Consideration
- Whether parallel proceedings by Central and State GST authorities on the same subject matter are sustainable.
- Whether the assessee can be compelled to participate in both proceedings simultaneously.
Held by the High Court
- Parallel proceedings are legally sustainable where:
- One authority issues summons/investigation, and
- Another authority initiates adjudication by issuing SCN.
- The assessee cannot avoid compliance merely on the ground that another authority is also proceeding on the same issue.
- The Court directed that:
- The assessee must appear before the Central GST Authority and file a reply to the SCN.
- The assessee must also comply with the summons issued by the State GST Authority.
Safeguards Directed by the Court
- Central and State GST authorities must coordinate with each other.
- Coordination should ensure that:
- The assessee is not subjected to multiple adjudicatory proceedings on the same subject matter.
- There is no parallel adjudication or conflicting orders.
Key Legal Principle
Multiplicity of proceedings under GST is permissible only to the extent of investigation and adjudication, provided authorities act in coordination and avoid parallel adjudication on identical issues.
Practical Significance
- Assessees cannot seek blanket protection against parallel GST actions.
- Relief may be granted only to prevent double adjudication, not investigation.
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Authorities must adopt an institutional coordination mechanism between CGST and SGST wings.