Court holds jurisdictional and factual disputes between Central and State GST investigations should be resolved by appellate authority under Section 107 of CGST Act, 2017, leaving questions of overlapping proceedings open.
In a significant judgment delivered on 18th September 2026, the Delhi High Court (Division Bench comprising Justices Anil Kshetarpal and Shail Jain) dismissed the writ petition filed by Saraswati Printers challenging the jurisdiction of the Directorate General of GST Intelligence, Delhi Zonal Unit (DGGI/DZU) to initiate proceedings under the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner had contended that parallel proceedings initiated by the State GST authorities barred the Central GST investigation under Section 6(2)(b) of the CGST Act, and thus the Show Cause Notice and consequential Order-in-Original confirming a tax demand of over Rs. 5.7 crore were without jurisdiction.
The petitioner, a partnership firm engaged in printing labels and bar-code stickers, was subjected to multiple GST investigations. The State GST authorities had initiated proceedings under Section 73 of the Delhi GST Act for the financial years 2017-18, 2018-19, and 2019-20, leading to confirmed demands related to alleged wrongful availment of Input Tax Credit (ITC) from cancelled or non-existent suppliers. Subsequently, the DGGI issued a Show Cause Notice under Section 74 of the CGST Act, alleging fraudulent availment of ITC on the basis of bogus invoices and conducted searches at the petitioner's premises in 2020. The petitioner challenged the jurisdiction of the DGGI proceedings on the ground that the subject matter was already under adjudication by State authorities, invoking the statutory embargo under Section 6(2)(b) which prohibits parallel proceedings.
The Court, however, declined to entertain the writ petition after noting that the adjudicating authority had already passed an Order-in-Original on 31st January 2025 confirming the demand. Observing that a statutory remedy of appeal lies under Section 107 of the CGST Act against the order, the Court emphasized that jurisdictional and factual disputes regarding the overlap of proceedings are better suited for determination by the appellate authority. The Court refrained from expressing any opinion on whether the two proceedings related to the "same subject matter" as envisaged under Section 6(2)(b), or on the merits of the demand, leaving these questions open for statutory adjudication.
The judgment underscored that the writ jurisdiction under Article 226 of the Constitution should not be exercised when an efficacious alternative remedy exists. The Court also noted conflicting contentions regarding the nature of the investigations: the State GST proceedings were based on return scrutiny and discrepancies in ITC claims, whereas the DGGI's investigation was intelligence-driven, focusing on fraudulent invoices and wilful misstatements. The Court held that such complex factual inquiries require detailed examination by the appellate authority.
The petitioner was thus relegated to pursue its grievances through the statutory appellate mechanism, with liberty to raise all grounds including the jurisdictional objection under Section 6(2)(b), the alleged overlap of proceedings, and challenges to the quantum and validity of the demand confirmed by the Order-in-Original. The Court dismissed the writ petition and pending applications, clarifying that its judgment does not preclude any arguments or remedies available before the appellate authority.
This ruling reiterates the principle that parallel proceedings under the CGST and State GST Acts demand careful coordination and factual scrutiny, but judicial interference is limited when a statutory appeal is available. It also highlights the importance of following procedural safeguards and departmental guidelines to avoid duplication and conflicting demands in GST enforcement actions.
Bottom Line:
Goods and Services Tax (GST) - Parallel proceedings under CGST Act and State GST Act - Writ Petition challenging jurisdiction of Central GST authorities dismissed - Availability of statutory appellate remedy under CGST Act emphasized - Jurisdictional and factual objections can be raised before appellate authority.
Statutory provision(s):
Central Goods and Services Tax Act, 2017 Section 6(2)(b), Section 74, Section 73, Section 107; Delhi Goods and Services Tax Act, 2017 Section 73; Integrated Goods and Services Tax Act, 2017 Section 20
