TaxTMI 
TaxTMI 
TaxTMI 
The Hon’ble Supreme Court in the case of Sree UGCL Projects Ltd. (Earlier Known As United Global Projects Ltd) & Anr. Versus The Additional Director (Directorate General of GST Intelligence) & Anr. - 2025 (11) TMI 588 - SC Order held that the operation of the Bombay High Court order is stayed and issued notice to the Revenue to examine whether Section 6(2)(b) of the CGST Act, which bars duplicate or parallel proceedings, is violated when authorities rely on circulars to permit such proceedings.
Facts:
Sree UGCL Projects Ltd. (“the Petitioner”) is an assessee under the GST laws, aggrieved by initiation of proceedings and order-in-original by the Central GST Authorities, when proceedings for the same period (AY 2017-18 and 2018-19) had already been initiated by State GST Authorities.
The Respondent, Additional Director (DG GST Intelligence) & Ors. (“the Respondent”), proceeded against the Petitioner, despite the existence of an order from State authorities for part of the assessment years, arguing that the scope of the Central proceedings was broader.
The Petitioner contended that Section 6(2)(b) of the CGST Act explicitly bars parallel or duplicate proceedings on the same matter by State and Central authorities, and that reliance upon CBIC circulars or instructions permitting parallel action is legally unsustainable.
The Respondent contended that since the Central proceedings covered a broader period or different issues, the bar under Section 6(2)(b) was not attracted; the High Court accepted this as a matter to be determined by the Appellate Authority, and dismissed the writ petition on grounds of alternate remedy, giving liberty to file appeal without limitation.
The Petitioner, dissatisfied, approached the Supreme Court arguing that circulars cannot override a statutory bar, and seeking stay of all further proceedings pending adjudication.
Issue:
Whether, under Section 6(2)(b) of the CGST Act, a circular or executive instruction can permit parallel proceedings on the same subject-matter by both Central and State GST authorities, overriding the statutory prohibition, and whether such action is valid?
Held:
The Hon’ble Supreme Court in Sree UGCL Projects Ltd. (Earlier Known As United Global Projects Ltd) & Anr. Versus The Additional Director (Directorate General of GST Intelligence) & Anr. - 2025 (11) TMI 588 - SC Orderheld as under:
- Observed that, it is a substantial issue whether Section 6(2)(b) of the CGST Act precludes parallel or duplicate proceedings by Central and State authorities, and whether statutory bar can be overridden or diluted by administrative circulars.
- Issued notice to the Union of India and other respondents, returnable in six weeks.
- Directed that “the effect and operation of the impugned judgment and order” of the Bombay High Court as well as consequential actions shall remain stayed in the interim.
Our Comments:
The Hon’ble Bombay High Court in United Global Corporation Ltd. Versus The Additional Director (Directorate General of GST Intelligence) - 2025 (11) TMI 662 - BOMBAY HIGH COURT applied the precedent in M/s ARMOUR SECURITY (INDIA) LTD. Versus COMMISSIONER, CGST, DELHI EAST COMMISSIONERATE & ANR. – 2025 (8) TMI 991 - Supreme Court, holding that intricate issues on parallel proceedings were best decided by the Appellate Authority, not in writ, citing Oberoi Constructions Ltd., K. Raheja Private Ltd., M/s Bridgeview Real Estate Development LLP, Neepa Real Estates Private Limited, Roma Builders Private Limited, Glider Buildcon Realtors Private Limited Versus The Union of India, through the Revenue Secretary Ministry of Finance, New Delhi Versus The Joint Commissioner, circle - G CGST & CEx, (Audit-II), Mumbai, The Commissioner of CGST & CEx, Mumbai, The Additional Commissioner, CGST CX, Mumbai, The Joint Commissioner, CGST Mumbai, The State of Maharashtra, Municipal Commissioner, Municipal Corporation of Greater Mumbai., The Commissioner of State Tax Mumbai, The Assistant Commissioner of State Tax, Investigation - C, Mumbai, The Joint Commissioner, CGST & C Ex, (Audit – II), Mumbai, The Commissioner of CGST & Cex, Mumbai. - 2024 (11) TMI 588 - BOMBAY HIGH COURT on the doctrine of exhaustion of alternate remedies.
The Hon’ble Supreme Court in the case of M/s ARMOUR SECURITY (INDIA) LTD. Versus COMMISSIONER, CGST, DELHI EAST COMMISSIONERATE & ANR. – 2025 (8) TMI 991 - Supreme Court, clarified that issuance of summons under Section 70 of the CGST Act does not amount to “initiation of proceedings” under Section 6(2)(b), which bars parallel proceedings on the “same subject matter.”
The Hon’ble High Court of Jammu and Kashmir and Ladakh in the case of R.K. Ispat Ltd. through Ram Avtar Aggarwal Silklon Processors Pvt. Ltd. through Vikrant Sharma Chenab Industries Pvt. Ltd. through Kush Aggarwal Jyotsana Industries Pvt. Ltd through Sajan Marriya J&K Textorium Pvt. Ltd. through Rajesh Kumar J&K Synthetic Pvt. Ltd. through Rajesh Kumar M/s Natural Industries through Ram Avtar Aggarwal Toplon Industries Pvt. Ltd. through Kush Aggarwal Orbit Spinning Pvt. Ltd. through Sajan Marriya Green Textorium Pvt. Ltd. through Rajesh Kumar Versus Union of India and others. - 2025 (10) TMI 170 - JAMMU AND KASHMIR AND LADAKH HIGH COURT held that cross-empowerment under Section 6 of the CGST Act is automatic and does not require a separate government notification unless conditions are imposed, aligning with recent Kerala High Court in the case of Pinnacle Vehicles And Services Private Limited Versus Joint Commissioner, (Intelligence & Enforcement), Kozhikode, Joint Commissioner, (General), Thiruvananthapuram, Commissioner, Taxes, Thiruvananthapuram, The Secretary, GST Council, New Delhi. - 2025 (1) TMI 838 - KERALA HIGH COURT and Karnataka High Court in the case of SLM Stationery Versus Union Of India, The Goods And Services Tax Council, Joint Commissioner Of Commercial Taxes (Enforcement), Belagavi, Commercial Tax Officer (Enforcement) -2 Vijayapur. - 2025 (4) TMI 232 - KARNATAKA HIGH COURT rulings which held that cross-empowerment under Sub-section (1) of Section 6 the CGST Act is inbuilt and does not require a separate notification by the Government of India. However, the Madras High Court in Tvl. Vardhan Infraastructre, Represented by its Partner, S. Manikandan, Chennai Versus The Special Secretary, The Chairman, Central Board of Indirect Taxes, The Additional Chief Secretary & Commissioner of State Taxes, The Director General of GST Intelligence, South, The Senior Intelligence Officer, The Assistant Commissioner (ST) - 2024 (3) TMI 1216 - MADRAS HIGH COURT held that for effectuating cross-empowerment, the issuance of a notification by the Government on the recommendations of the GST Council is a sine qua non.
Relevant Provisions:
Section 6(1) & (2) of the CGST Act, 2017.
Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances
(1) Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification3, specify.
(2) Subject to the conditions specified in the notification issued under sub-section (1),
(a) where any proper officer issues an order under this Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of State tax or Union territory tax;
(b) where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax 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.
CBEC/20/43/01/2017-GST dated October 5, 2018
“3. It is accordingly clarified that the officers of both Central tax and State tax are authorized to initiate intelligence based enforcement action on the entire taxpayer’s base irrespective of the administrative assignment of the taxpayer to any authority. The authority which initiates such action is empowered to complete the entire process of investigation, issuance of SCN, adjudication, recovery, filing of appeal etc. arising out of such action.”
CBEC-20/10/07/2019-GST dated June 22, 2020
“3.3 The confusion seems to be arising from the fact that, the said sub-section provides for notification by the Government if such cross empowerment is to be subjected to conditions. It means that notification would be required only if any conditions are to be imposed. For example, Notification No. 39/2017-CT dated 13.10.2017 restricts powers of the State Tax officers for the purposes of refund and they have been specified as the proper officers only under section 54 and 55 of the CGST Act and not under rule 96 of the CGST Rules, 2017 (IGST Refund on exports). If no notification is issued to impose any condition, it means that the officers of State and Centre have been appointed as proper officer for all the purpose of the CGST Act and SGST Acts.
4. Further, it may kindly be noted that a notification under section 6(1) of the CGST Act would be part of subordinate legislation which instead of empowering the officer under the Act, can only be used to impose conditions on the powers given to the officers by the section. In the absence or any such conditions, the power of Cross- empowerment under section 6(1) of the CGST Act is absolute and not conditional.”
(Author can be reached at [email protected])