SC to Examine Whether Circulars Can Override Statutory Bar on Parallel GST Proceedings

The Hon'ble Supreme Court in the case of Sree UGCL Projects Ltd. v. Additional Director (Directorate General of GST Intelligence) [SLP (C) No. 30756/2025, order dated November 10, 2025] 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 SLP (C) No. 30756/2025 held 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. &Anr. V. The Additional Director [WP No. 5271/2024 dated October 8, 2025] applied the precedent in Armour Security (India) Ltd. v. Commissioner, CGST [2025 SCC OnLine 770], holding that intricate issues on parallel proceedings were best decided by the Appellate Authority, not in writ, citing Oberoi Constructions Ltd. v. Union of India [OS WP(L) 33260/2023, November 11, 2024] on the doctrine of exhaustion of alternate remedies.

The Hon'ble Supreme Court in the case of M/s Armour Security (India) Ltd. v. Commissioner [Special Leave Petition (C) No. 6092 of 2025 judgment dated August 14, 2025]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 RKIspat v. Union of India [(WP(C) No. 1074/2024), order dated September 30, 2025] 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 & Services Pvt Ltd v. Joint Commissioner [(2025) 1 TMI 838] and Karnataka High Court in the case of SLM Stationery v. Union of India [(2025) 4 TMI 232] rulings which held that cross-empowerment under Subsection (1) of Section 6 the CGSCT Act is inbuilt and does not require a separate notification by the Government of India. However, the Madras High Court in Tvl. Vardhar Infrastructure v. DGGSTI [(2024) 3 TMI 1216] 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."

OFFICIAL JUDGMENT COPY HAS BEEN ATTACHED