Parallel Proceedings are not permissible in the GST regime

The Hon’ble Delhi High Court in the case of M/S. SUN AUTOMATION LIMITED VERSUS SALES TAX OFFICER CLASS II/AVATO & ORS. - 2025 (5) TMI 915 - DELHI HIGH COURT held that parallel proceedings cannot run simultaneously in GST regime as against the Petitioner given the fact that the Central Goods and Services Tax Department (“theCGST Department”) had already adjudicated the matter on the same issue and the Delhi Goods and Services Tax Department (“theDGST Department”) does not have the power to adjudicate on the same vide Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (“theCGST Act”).

Facts:

M/s Sun Automation Limited (“the Petitioner”) challenged the Show Cause Notice (“SCN”) dated November 27, 2024 and the subsequent Adjudication Order dated February 27, 2025 (“the Impugned Order”) issued by Sales Tax Officer Class II/AVATO jurisdiction (“the Respondent”), pertaining to tax period April 2020 to March 2021 raising a demand of ₹157.66 crores against the petitioner. The Petitioner contended that the CGST Department had already adjudicated on the same matter, and the Commissioner (Appeals-I), CGST, had already passed an Order in Appeal dated April 03, 2025, imposing a penalty on the petitioner. Hence, aggrieved by the Impugned Order, the Petitioner has filed the present writ petition.

Issue:

Whether parallel proceedings by the CGST/SGST authorities are permissible under the GST regime?

Held:

The Hon’ble Delhi High Court in M/S. SUN AUTOMATION LIMITED VERSUS SALES TAX OFFICER CLASS II/AVATO & ORS. - 2025 (5) TMI 915 - DELHI HIGH COURTheld as under:

• Noted that, the appellate order passed by the CGST Appellate Authority had not been considered by the DGST department when issuing the Impugned Order.
• Relied On, in the case of AMIT GUPTA VERSUS UNION OF INDIA AND ORS. - 2023 (10) TMI 143 - DELHI HIGH COURT, where it was held that parallel proceedings violate the mandate of Section 6(2)(b) of the CGST Act and cross-empowerment does not mean duplication of adjudication.
• Held that, the Impugned Order was liable to be set aside, and, the Order of Commissioner (Appeals-I), CGST dated April 3, 2025, shall be placed before the DGST Department so that the matter can be considered afresh. A personal hearing shall be afforded to the Petitioner, before taking any decision.

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