Multiplicity of Proceedings Under GST - When Two Authorities Cannot Pursue the Same Dispute Concluding Part III - From the Supreme Court Roadmap to a Workable Approach for Preventing Multiplicity

The Journey So Far - A Quick Recap of Parts I and II

Part I of this Article began by outlining the statutory foundation of the controversy. GST is administered by both the Centre and the States, and therefore necessarily involves cross-empowerment. Section 6(2)(b), however, places an important restriction on that shared power: once a competent authority has initiated proceedings on a particular subject matter, another authority cannot initiate proceedings on the same subject matter.

Part I also examined the two distinct High Court approaches that developed around the expressions "proceedings" and "same subject matter". Decisions such as M/s G.K. Trading Company Versus Union of India And 4 Others - 2021 (1) TMI 130 - ALLAHABAD HIGH COURT, and Kuppan Gounder P.G. Natarajan Versus Directorate General of GST Intelligence, New Delhi - 2021 (8) TMI 136 - MADRAS HIGH COURT, protected legitimate investigation by distinguishing summons and inquiry from formal adjudicatory proceedings. Decisions such as Anurag Suri Versus The Director General of Goods and Services Tax Intelligence and others - 2021 (4) TMI 73 - ORISSA HIGH COURT, M/s. R.P. Buildcon Private Limited & Anr. Versus The Superintendent, CGST & CX, Circle – II, Group - 10 & ors - 2022 (10) TMI 501 - CALCUTTA HIGH COURT, and Vivek Narsaria Versus The State of Jharkhand, The Commissioner of State Taxes, Joint Commissioner of State Taxes, Ranchi, The Principal Commissioner, Central Goods & Service Tax and Central Excise, The Senior Intelligence Officer, Directorate General of GST Intelligence, Jamshedpur - 2024 (1) TMI 809 - JHARKHAND HIGH COURT, focused more strongly on the taxpayer's protection against repeated governmental action.However, M/s Kundlas Loh Udyog Versus State of H.P. & Anr. - 2024 (9) TMI 1236 - HIMACHAL PRADESH HIGH COURT, suggested an important middle path: where another authority obtains useful intelligence concerning a matter already under examination, the information can be shared instead of automatically becoming the basis of another proceeding.

Part II then examined how the Supreme Court in M/s ARMOUR SECURITY (INDIA) LTD. Versus COMMISSIONER, CGST, DELHI EAST COMMISSIONERATE & ANR. - 2025 (8) TMI 991 - Supreme Court, brought greater clarity to this conflict. The Court distinguished investigation from adjudication, explained the meaning of "same subject matter", recognised the importance of partial overlap, and laid down a practical mechanism of disclosure, communication and coordination where Central and State actions appear to intersect.

The combined position emerging from Parts I and II is therefore that cross- empowerment does not create exclusive jurisdiction merely because one authority takes the first investigative step. At the same time, it does not permit duplicate adjudication of the same or overlapping liability. With this background, the earlier High Court decisions can now be viewed together and tested against the framework laid down in Armour Security.

Completing the Pre-Armour Security Judicial Picture - Three Important High Court Decisions

Before placing the earlier rulings in comparative tables, two decisions merit brief discussion because both were subsequently noticed by the Supreme Court in Armour Security and represent the two competing approaches that had developed before the controversy was settled.

In Stalwart Alloys India Pvt. Ltd. v. Union of India & Ors., 2024 SCC OnLine P&H 15153 : 2024-VIL-920-P&H, State GST authorities and different DGGI formations were examining allegations of wrongful availment of ITC. The State authority had already commenced an inquiry, while DGGI subsequently undertook further search and investigation, and the matter was sought to be shifted for centralised investigation. The Punjab & Haryana High Court emphasised that Central and State GST authorities exercise equal statutory powers and that proceedings already initiated by one proper officer cannot simply be transferred to another through administrative directions. The judgment therefore reflected a wider concern that jurisdictional overlap should not become a reason for administrative transfer or duplication.

The Kerala High Court, in K.T. Saidalavi, Mozart Global Furniture, Tip Top Furniture Industries, CASA Furniture (P) Ltd., Tip Top Furniture Land, Versus The State Tax Officer, Senior Intelligence Officer, Directorate General of GST Intelligence, Thiruvananthapuram, The Superintendent (Prev), Central Tax And Central Excise, Calicut, The Commissioner, Central Tax And Central Excise, Kozhikode, State Tax Officer (Intelligence), Malappuram, The Commissioner of State GST, Thiruvananthapuram. The Asst. Commissioner (Assmnt), Malappuram. - 2024 (10) TMI 1119 - KERALA HIGH COURT, reinforced the distinction between an inquiry and formal proceedings under Section 6(2)(b). The Court held that the initiation of an inquiry or the issuance of a summons under Section 70, by itself, does not amount to the initiation of "proceedings". A summons is essentially a tool for gathering information and evidence, whereas formal proceedings begin when the statutory process for determining liability is set in motion. The decision therefore followed the same broad approach as G.K. Trading and Kuppan Gounder and later received support from the reasoning adopted by the Supreme Court in Armour Security.

A different approach was adopted by the Rajasthan High Court in Rais Khan Proprietor of M/s. Kota Metals Versus Add. Commissioner, Enforcement Wing-II Rajasthan, Assistant Commissioner, B1 Enforcement Wing II Jaipur, Additional Director, Directorate General of GST Intelligence DGGI, JZU, Jaipur, Intelligence Officer, Directorate General of GST Intelligence, Udaipur, The Union Of India, State of Rajasthan - 2024 (3) TMI 1086 - RAJASTHAN HIGH COURT. There, summons issued by DGGI were challenged on the ground that the State GST authorities had already acted. The High Court rejected the objection and held that "proceedings" under Section 6(2)(b) and an "inquiry" under Section 70 cannot be treated as the same thing. Mere issuance of summons, therefore, did not amount to initiation of proceedings. The decision followed the same broad line as the above-mentioned G.K. Trading, Kuppan Gounder and later K.T. Saidalavi.

These two rulings neatly illustrate the judicial divide that existed before Armour Security. Stalwart Alloys stressed protection against overlapping statutory action, while Rais Khan protected the ability of another competent authority to continue an inquiry. The Supreme Court subsequently brought these concerns together by allowing genuine investigation to continue while preventing duplicate adjudication of the same or overlapping liability.

Judicial Position at a Glance - Two Lines of High Court Decisions

The High Court decisions preceding Armour Security are best understood as reflecting two distinct concerns rather than two irreconcilable theories. One group was primarily concerned with preventing repeated proceedings against the taxpayer. The other was concerned that Section 6(2)(b) should not prematurely halt legitimate investigation merely because another authority had already issued summons or started an inquiry.

For ready reference, the decisions may conveniently be grouped into the following two categories.

I. Judgments Restraining Multiplicity or Favouring One Continuing Proceeding

The common concern running through these judgments was that cross-empowerment should not become a repeated governmental pursuit of substantially the same controversy. They looked beyond the mere existence of statutory power and considered the practical burden imposed when several formations demand the same records or examine the same transactions.

After Armour Security, however, these judgments have to be read with an important qualification. The first summons, search or investigation does not automatically confer exclusive jurisdiction on one authority. Their continuing value lies primarily in the broader protection against actual duplication and in the need for communication and coordination where the subject matters substantially overlap.

II. Judgments Permitting Parallel Inquiry or Rejecting the Multiplicity Objection

The key principle here is that Section 6(2)(b) should only apply once the dispute's subject matter has become sufficiently clear. An investigating authority might identify a different violation or determine that no claim is justified. Therefore, considering the initial summons as the start of exclusive jurisdiction could unjustifiably limit proper enforcement.

Armour Security Brings the Two Judicial Approaches Together

The two sets of decisions may appear to pull in opposite directions, but the difference was largely one of emphasis. One line was concerned that legitimate investigation should not be halted merely because another authority had issued a summons. The other was concerned that the taxpayer should not repeatedly face different GST authorities over substantially the same dispute. Both concerns were genuine. What was missing was a clear line marking where permissible investigation ends and prohibited duplication begins.

Armour Security has substantially supplied that line. The Supreme Court accepted that investigation must be given reasonable room to operate. Summons, search and seizure are tools for collecting information and evidence and, by themselves, do not mean that formal proceedings on a definite subject matter have commenced. Thus, the first authority to issue a summons does not automatically acquire exclusive jurisdiction over every issue concerning that taxpayer.

At the same time, investigative freedom does not extend to duplicate adjudication. Once formal proceedings have begun and another authority seeks to pursue the same or partially overlapping liability arising from the same contravention, Section 6(2)(b) becomes relevant. The taxpayer-protective concern reflected in the earlier decisions therefore survives, but it now operates at the correct stage.

In practical terms, five questions are useful whenever multiplicity is alleged: What was the first action-an inquiry, summons, search, audit or formal notice? Had the alleged contravention taken a definite shape? What exactly is the second authority examining? Are the underlying transactions and alleged contraventions the same? And is the tax liability identical or partly overlapping? The answers will ordinarily indicate whether both actions can legitimately continue or whether the later adjudicatory proceeding must give way.

The present law can therefore be expressed simply: parallel investigation is not necessarily prohibited, but parallel adjudication of the same or overlapping tax dispute is.

After Armour Security - High Courts Move Towards Coordination Rather Than Immediate Quashing

The importance of Armour Security can now be seen in later High Court decisions. The emerging approach is not that every allegation of overlap should automatically result in quashing of the subsequent summons or notice. Courts are increasingly requiring the taxpayer to disclose the earlier action and directing the Central and State authorities to verify whether the subject matters actually overlap.

A useful illustration is M/s. Radha Krishan Industries Versus Union of India & Ors. - 2026 (5) TMI 627 - HIMACHAL PRADESH HIGH COURT. The taxpayer challenged a show cause notice issued by the Central GST authorities under Section 74(1) on the ground that the State GST authorities had already initiated inquiry proceedings concerning the same subject matter. The Himachal Pradesh High Court relied upon paragraphs 96 and 97 of Armour Security.

Significantly, the High Court did not simply quash the Central notice. It directed the taxpayer to respond to the show cause notice and raise all relevant objections before the authorities. At the same time, both Central and State GST authorities were directed to communicate and coordinate so that the taxpayer was not subjected to multiple adjudicatory proceedings concerning the same controversy.

This decision shows an important shift in the post-Armour Security approach. The first response to apparent overlap is verification and coordination, not automatic invalidation. Investigation may continue, but the statutory bar must be respected once it is established that both proceedings cover the same or overlapping liability.

The same trend is visible in other post-Armour Security rulings noticed in Radha Krishan Industries. In M/s. Agrawal Soya Extracts Pvt. Ltd. Through Its Director Shri Deepak Singhal Versus Union of India And Others - 2025 (9) TMI 1210 - MADHYA PRADESH HIGH COURT , Sensation Infracon Pvt. Ltd. Versus The State of Telangana - 2025 (8) TMI 1129 - TELANGANA HIGH COURT , and Ravi Steel Industries Versus Union of India and Others - 2025 (10) TMI 544 - BOMBAY HIGH COURT, taxpayers were directed to place the relevant summons, notices and supporting documents before the competent authorities, which were then expected to examine the objection in terms of paragraphs 96 and 97 of Armour Security.

The emerging practical rule is therefore becoming clearer: the taxpayer must disclose the overlap; the authorities must compare and coordinate; and the court may intervene where duplicate adjudication nevertheless continues.

Coordination Is Also a Matter of Institutional Comity

The protection against multiplicity is not concerned only with the convenience of the taxpayer. Armour Security also links Section 6 to the broader principle of comity between coordinate authorities. Central and State GST officers exercising cross-empowered jurisdiction are expected to respect each other's lawful domain so that the same controversy does not result in inconsistent determinations.

The Supreme Court explained that Section 6 serves a twofold purpose: to protect taxpayers from being proceeded against by more than one authority on the same subject matter and to enable a comprehensive determination that avoids multiplicity and conflicting decisions. Coordinate authorities must therefore act with mutual respect and due regard for each other's jurisdiction.

This institutional discipline provides a natural bridge to the converse concern of forum shopping, where the problem is not too many authorities pursuing the taxpayer, but the use or choice of jurisdiction according to convenience.

The Other Side of the Coin - When Multiplicity Meets Forum Shopping

Multiplicity of proceedings typically occurs when multiple authorities aim to address the same controversy, leaving the taxpayer overwhelmed with numerous forums. Conversely, forum shopping is when a litigant deliberately chooses, shifts, or creates a more favourable forum for his or her desired outcome.

Not every remedy choice is forum shopping; the law allows lawful remedies, and taxpayers can use available options. Problems arise when jurisdictional links are artificially fabricated, previous proceedings are hidden, the same relief is sought after an unfavourable outcome, or efforts are made to avoid a burdensome legal position.

While both concepts are related through the idea of jurisdiction management, they operate differently: multiplicity involves jurisdiction duplication, and forum shopping involves manipulating jurisdiction to gain an advantage or better opportunity.

Forum Shopping and the Discipline of Judicial Precedent

The issue becomes important when different High Courts take different views on the same GST provision. Although GST law is largely common across the country, differences in interpretation may arise until the Supreme Court finally settles the legal position.

As a general rule, a tax authority must follow the law laid down by the High Court within whose jurisdiction it functions. A different view taken by another High Court may be relevant and persuasive, but the authority cannot prefer that view merely because it is more favourable to the Department or supports the proposed demand.

Otherwise, conflicting High Court decisions could become a choice between convenient alternatives. An adjudicating authority cannot simply select whichever judgment suits its case. Judicial discipline requires the decision of the jurisdictional High Court to be followed unless a higher court has laid down a different binding position.

This principle is closely connected with multiplicity of proceedings. Section 6(2)(b) prevents different authorities from pursuing the same adjudicatory dispute, while the rule against forum shopping prevents a party or authority from shifting or choosing a forum merely to obtain a more favourable result. In both situations, jurisdiction must be governed by law, not convenience.

The Final Message - One Dispute, One Adjudicatory Path

Multiplicity of proceedings is a natural concern under GST because both Central and State authorities have significant administrative and enforcement powers. Cross-empowerment makes the system workable, but those powers must be exercised in a coordinated manner so that the taxpayer is not repeatedly proceeded against for the same dispute.

Armour Security Case has provided the necessary clarity. Investigation and adjudication are distinct. The same taxpayer or financial year does not necessarily mean the same subject matter. However, once the same or overlapping liability arising from the same contravention becomes the subject of formal proceedings, it should not be pursued through separate adjudicatory proceedings. Later High Court decisions further show that disclosure by the taxpayer and coordination between the authorities provide the practical way forward.

Forum shopping presents the other side of the problem. Just as different authorities should not pursue the same dispute, jurisdiction should not be shifted or chosen merely to obtain a more favourable result. Both principles ultimately require fairness and discipline in the exercise of jurisdiction.

The message emerging from this three-part discussion can therefore be stated simply: GST may confer powers on more than one authority, and information may come from many sources, but the same tax dispute should ultimately follow one fair and coordinated adjudicatory path.

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