Summons Do Not Constitute “Initiation of Proceedings” Under Section 6(2)(b) of CGST, Says Supreme Court

A bench of Justices J.B. Pardiwala and R. Mahadevan heard a Special Leave Petition by M/s Armour Security (India) Ltd. challenging a Delhi High Court order that refused to quash summons issued under Section 70 of the Central Goods and Services Tax Act, 2017. The petition contested the exercise of jurisdiction by a Central GST officer while show cause proceedings under Section 73 had already been served by the State/other authority, invoking Section 6(2)(b) of the CGST Act which bars initiation of proceedings on the “same subject matter”.

The Court dismissed the Special Leave Petition and gave detailed reasons explaining the scope of Section 6. It held that the phrase “initiation of any proceedings” under Section 6(2)(b) referred to the formal commencement of adjudicatory proceedings by issuance of a show cause notice and did not encompass preliminary steps such as search, seizure or issuance of summons under Section 70. The Court emphasised the twin concepts of “single interface” and “cross-empowerment” within the GST architecture and clarified that intelligence-based enforcement could be initiated by either Central or State authorities subject to the bar on duplicate adjudication of the same subject matter once a show cause notice had crystallised the dispute. The Court, in its reasoning, observed: Background The petitioner, a Delhi-registered security services company, received a show cause notice dated 18.11.2024 under Section 73 for tax periods April 2020–March 2021 demanding approximately Rs. 1.25 crore on account of alleged under-declaration and excess ITC claims. Subsequent to a search at the petitioner’s premises on 16.01.2025, officers of the Commissionerate (respondent no.1) seized electronic devices and issued summons under Section 70 on 16.01.2025 and 23.01.2025 to company directors to produce documents. The petitioner contended that respondent no.2 had already initiated proceedings on the same subject matter and that Section 6(2)(b) barred any parallel action by respondent no.1. The Delhi High Court dismissed the writ petition, holding that issuance of summons and the conduct of inquiry did not amount to “proceedings” under Section 6(2)(b), which was aimed at preventing parallel adjudicatory proceedings such as those under Sections 73 and 74.

On appeal, senior counsel for the petitioner relied on Section 6(2)(b), GST Council minutes and CBEC circulars (notably the 05.10.2018 circular on cross-empowerment) to argue that “any proceedings” should be read broadly to include summons-based inquiries where the subject matter overlapped. The petitioner underlined the single-interface objective and the statutory definition of “proper officer”. The Court analysed divergent High Court authorities on whether inquiry or summons constituted initiation of proceedings, reviewed the scheme of Section 6 (including clauses (a) and (b)), the policy of single interface and cross-empowerment, and relevant circulars and guidelines. It concluded that preliminary evidence-gathering, searches or summons were not by themselves the “initiation of proceedings” under Section 6(2)(b); rather, issuance of a show cause notice crystallised the subject matter and thereby triggered the bar against another authority initiating adjudicatory proceedings on the same subject matter. The Court directed adherence to departmental Guidelines on Issuance of Summons (17.08.2022), set out a twofold test for “same subject matter” (identity of liability on same facts and identity of demand/relief), and issued procedural guidelines for inter-authority coordination and record-sharing. The Special Leave Petition stood dismissed and the High Court order was affirmed; the Court also highlighted taxpayer obligations to cooperate and the availability of writ remedy if guidelines were breached.

Case Details: Case No.: SPECIAL LEAVE PETITION (C) No. 6092 of 2025 (2025 INSC 982) Case Title: M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East Commissionerate & Anr. Appearances: For the Petitioner(s): Mr. Sridhar Potaraju, Senior Counsel For the Respondent(s): Counsel not indicated / not recorded in the judgment