Supreme Court Clarifies GST Jurisdiction | Central Authority Can Issue Summons As “Not Initiation Of Proceedings” Under S.6(2)(b) CGST Act
Kiran Raj
The Supreme Court of India Division Bench of Justice J.B. Pardiwala and Justice R. Mahadevan held that summons issued under Section 70 of the Central Goods and Services Tax Act, 2017 are not barred by Section 6(2)(b) and declined to interdict the ongoing inquiry. The Court sustained the High Court’s approach that summons and search/investigation are precursors to formal proceedings and directed adherence to existing guidelines governing the issuance of summons. Concluding the matter, the Bench disposed of the petition “in the above terms” and left pending applications also disposed.
The matter arose from summons issued under Section 70 of the CGST Act by the Central tax authority (Delhi East Commissionerate) requiring production of documents. The petitioner is a public limited company incorporated under the Companies Act, 2013, registered with the Delhi GST authorities (GSTIN: 07AADCA5862E2ZS) and engaged in the business of providing security services.
On 18 November 2024, the State tax authority (respondent no. 2 in the Supreme Court record) issued a show cause notice under Section 73 for the tax period April 2020 to March 2021. The notice raised an aggregate demand of ₹1,24,92,162 (CGST, SGST, IGST) with interest and penalty under Sections 50 and 74. The stated grounds included (i) under-declaration of net tax due to non-reconciliation of turnovers in other returns and e-way bill information and (ii) excess claim of input tax credit (ITC).
On 16 January 2025, officers of the Central authority conducted a search at the registered premises under Section 67(2); a panchnama recorded the seizure of electronic devices and documents. Summons under Section 70 were then issued to four directors, calling for documents. A further summons dated 23 January 2025 directed one director to produce specified documents. The company responded by letter dated 24 January 2025 stating that the State authority was already investigating similar issues, including ITC claimed from cancelled suppliers, and sought release of seized devices and documents.
Aggrieved by the summons dated 16 January 2025 and 23 January 2025, the company filed a writ petition before the High Court of Delhi asserting that, since the State authority had already initiated inquiry on the same issue, Section 6(2)(b) barred the Central authority from proceeding on the same subject matter.
By order dated 7 February 2025, the High Court dismissed the writ petition and declined to interfere with the summons. It held that the expression “any proceeding” in Section 6(2)(b) cannot be construed to include search or investigation; a summons pursuant to a search is a precursor to formal proceedings, distinct from assessment, and primarily intended to elicit information. The High Court recorded that the statute intends to prevent parallel proceedings relating to assessment (notably under Sections 73 and 74) and that, at the summons stage, authorities are gathering information based on material collected, before determining any future course of action. The Court distinguished a Jharkhand High Court decision where both Central and State authorities were conducting parallel inquiries requiring reversal of ITC, noting that in the present matter the search came subsequent to earlier assessments and could not be construed as related to them.
Before the Supreme Court, the petitioner—represented by learned Senior Counsel Mr. Sridhar Potaraju—contended that Section 6(2)(b) expressly prohibits parallel proceedings on the same subject matter by State and Central authorities. He submitted that the Central summons concerning the availability of ITC in respect of cancelled dealers was barred because the State authority had already issued show cause notices on the same subject matter. Mr. Potaraju clarified that the petitioner did not dispute Central jurisdiction in respect of matters not covered by State show cause notices, but argued that the High Court erred in limiting Section 6(2)(b) to proceedings under Sections 73 and 74 or analogous provisions, thereby wrongly excluding summons under Section 70 from the bar.
He further drew attention to Section 146, submitting that the common portal reflects complete records and status of all proceedings initiated by either authority, so each is privy to the other’s actions; the summons in question, he argued, identified a subject matter identical to what the State authority was already considering. He invoked the GST Council’s cross-empowerment framework (including the 05.10.2018 Circular) and decisions such as Safari Retreats and K.P. Mohammed Salim to contend that the legislature’s use of “any proceedings” in Section 6(2)(b) is broad and inclusive, and that the CGST Act, as a special statute, demands literal construction.
The Supreme Court’s judgment sets out, in detail, contrary views taken by multiple High Courts on whether “proceedings” under Section 6(2)(b) include inquiries/investigations, including decisions that treat audits or multiple departmental actions for the same period as “proceedings” and restrain overlapping action, and decisions holding that summons/inquiry are not “proceedings” for this purpose.
After hearing counsel for the petitioner at length at admission on 6 March 2025, the Supreme Court decided to dismiss the Special Leave Petition, reserving reasons, and subsequently pronounced the detailed judgment on 14 August 2025.
The Court recorded, with reference to authorities relied upon and the statutory scheme, that summons/inquiry are not “proceedings” within Section 6(2)(b). Among the key passages: “A summons is not the culmination of an investigation, but merely a step in its course. It is in this context that the legislature has used the term ‘inquiry’ in Section 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 Section 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.”
“We affirm and appreciate the view taken by the High Court of Allahabad … [that] the issuance of summons cannot be conflated with a statutory step taken upon conclusion of an inquiry. Similarly, the High Court of Kerala was correct in holding that initiation of inquiry or the issuance of summons does not amount to the initiation of ‘any proceedings’. The phrase ‘initiation of any proceedings’ refers specifically to the issuance of a notice under the relevant provisions of the GST enactment.”
The Bench also directed attention to administrative guidance: “In view of the facts of the present case in hand, we would like to inject thrust into the Guidelines dated 17.08.2022, and direct the concerned Departments to adhere to the said Guidelines, in both letter and spirit.”
As to how “proceedings” are understood in the Act’s context, the Court cited dictionaries and earlier judgments: “It is not a technical expression with defined meaning attached to it but the one ambit of whose meaning will be governed by the statute. The word ‘proceedings’ can be given a narrow or wide import depending upon the nature and scope of an enactment in which it is used and in the particular context of the language of the enactment in which it appears.”
“An act which is done by the authority or direction of the court, express or implied; an act necessary to be done in order to attain a given end; a prescribed mode of action for carrying into effect a legal right.”
The Court explained why a show cause notice marks the beginning of “proceedings” and why its contents define the subject matter: “A show cause notice is a document served on a noticee, requiring them to explain why a particular action should not be initiated …”
“The central issue … pertains to the requirement of stating the action which is proposed to be taken. The fundamental purpose behind the serving of show-cause notice is to make the noticee understand the precise case set up against him … Another requirement … is the nature of action which is proposed to be taken … When it comes to blacklisting, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action.”
“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 … [U]nless the foundation of the case is made out in the show-cause notice, Revenue cannot … argue a case not made out in its show-cause notice.”
In elaborating why summons do not amount to “initiation,” the Bench recorded: “Proceedings, by their very nature, cannot be said to be initiated in the absence of certainty, nor can they culminate without adherence to the principles of natural justice. A show cause notice marks the commencement of a process that culminates in an order passed by the adjudicating authority … the mere issuance of summons does not imply that the Department has decided to proceed against the taxpayer for recovery of liability.”
Addressing Section 6(2)(b), the Court reproduced the text and described its purport: “Section 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.”
With respect to the Circular dated 05.10.2018, the Bench recorded: “We would like to underscore that this division of the taxpayer base does not operate as a bar to the initiation of enforcement action by Central Tax officers against a taxpayer assigned to the State Tax authority, and vice versa.”
“Enforcement action undertaken by any Department is ordinarily based on intelligence … and the authority initiating such action is empowered to carry the matter to its logical conclusion. The term ‘logical conclusion’ does not invariably refer to an order of assessment in every case.”
Finally, reiterating the High Court’s position as correct for the summons stage, the Court stated: “At the summons stage, it cannot be predicated 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’.”
In addition to sustaining the High Court’s view and declining interference with the summons, the Supreme Court issued operative directions and guidance.
The Court expressly directed adherence to the Central Board of Indirect Taxes & Customs “Guidelines on Issuance of Summons under Section 70” dated 17.08.2022, stating: “we would like to inject thrust into the Guidelines dated 17.08.2022, and direct the concerned Departments to adhere to the said Guidelines, in both letter and spirit.”
The Bench then formulated working principles governing overlapping inquiries and the role of taxpayers and authorities. It recorded that taxing authorities may conduct inquiry or investigation unless and until it is ascertained that both are examining identical liabilities or issuing overlapping show cause notices, and that any subsequent show cause notice covering an existing liability “shall be quashed.” The Court stated: “Any show cause notice issued in respect of a liability already covered by an existing show cause notice shall be quashed.”
It prescribed a coordination mechanism where two authorities find that the same matter is being examined. The Court recorded: “both authorities shall decide inter-se which of them shall continue with the inquiry or investigation. In such a scenario the other authority shall duly forward all material and information … to the authority designated to carry the inquiry or investigation to its logical conclusion.” The Bench added that, save for statutory protection against duplication, the taxable person has “no locus to claim which authority should proceed.”
Addressing cases where authorities cannot agree on which should proceed, the Court directed: “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.”
The Court recognized taxpayer recourse if the above framework is not followed and simultaneously required cooperation by taxpayers: “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 under Article 226 of the Constitution of India.” “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.”
The Bench also made suggestions to strengthen inter-departmental coordination and IT systems, noting that the DGGI “may consider adopting necessary measures to develop a robust mechanism for seamless data and intelligence sharing … including provision for real-time visibility to both authorities of any action taken pursuant to an intelligence input.”
Concluding the Court ordered: “Accordingly, the present petition is disposed of in the above terms. Pending application(s), if any, shall also stand disposed of.”
Case Title: M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate & Anr.
Neutral Citation: 2025 INSC 982
Case Number: SLP (C) No. 6092 of 2025
Bench: Justice J.B. Pardiwala; Justice R. Mahadevan
