Late Shri M.k. Sharma. vs Union Of India, Through Secretary, Finance Department,

Judgment

1. Union Of India, Through Secretary, Government Of India New Delhi

2. The Chief Commissioner, State Goods And Service Tax, Kar Bhawan, Ambedkar Circle, Jaipur

3. The State Of Rajasthan, Through Deputy Commissioner, State Tax, Circle-C, Zone-Iii, Kar Bhavan, Jhalana Doongari, Jaipur ----Respondents Connected With D.B. Civil Writ Petition No. 3348/2024 M/s. Larsen And Toubro Limited, 1St Floor, D 236 And 237 Sdc Monarch Building, Amrapali Marg, Vaishali Nagar, Jaipur, 302021

Through Its Authorized Signatory Mr. Shalil Kumar Sharma S/o Late Shri M.k. Sharma. Versus ----Petitioner

1. Union Of India, Through Secretary, Finance Department, Government Of India, New Delhi.

2. The Chief Commissioner State Goods And Service Tax, Kar Bhawan, Ambedkar Circle, Jaipur

3. The Joint Commissioner, State Tax, Circle-C, Zone-Iii, Kar Bhavan, Jhalana Doongari, Jaipur

4. The State Of Rajasthan, Through Commissioner State Goods And Service Tax, Kar Bhavan, Jaipur. ----Respondents For Petitioner(s) : Mr. Mayank Vyas Mr. Nikhil Sharma for Mr. Pankaj Ghiya (2 of 5) [CW-18618/2023] For Respondent(s) : Ms. Niti Jain Bhandari for Mr. Bharat Vyas (Sr. Adv.), AAG Mr. Sandeep Pathak with Ms. Jaya P. Pathak HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJEET PUROHIT 20/08/2025 Order The Hon’ble Supreme Court in the case of M/s. Armour Security (India) Ltd. vs. Commissioner, CGST, Delhi East Commissionerate & anr. (Special Leave Petition (C) No.6092/2025), decided on 14.8.2025 has held as under:-

96. We summarize our final conclusion as under:- i. Clause (b) of sub-section (2) of Section 6 of the CGST Act and the equivalent State enactments bars the "initiation of any proceedings" on the "same subject matter". ii. Any action arising from the audit of accounts or detailed scrutiny of returns must be initiated by the tax administration to which the taxpayer is assigned. iii. Intelligence based enforcement action can be initiated by any one of the Central or the State tax administrations despite the taxpayer having been assigned to the other administration. iv. Parallel proceedings should not be initiated by other tax administration when one of the tax administrations has already initiated intelligence- based enforcement action. v. All actions that are initiated as a measure for probing an inquiry or gathering of evidence or information do not constitute "proceedings" within the meaning of Section 6(2)(b) of the CGST Act. vi. The expression "initiation of any proceedings" occurring in Section 6(2)(b) refers to the formal commencement of adjudicatory proceedings by way of issuance of a show cause notice, and does not encompass the issuance of summons, or the conduct of any search, or seizure etc. vii. The expression "subject matter" refers to any tax liability, deficiency, or obligation arising from any (3 of 5) [CW-18618/2023] particular contravention which the Department seeks to assess or recover. viii. Where any two proceedings initiated by the Department seek to assess or recover an identical or a partial overlap in the tax liability, deficiency or obligation arising from any particular contravention, the bar of Section 6(2)(b) would be immediately attracted. ix. Where the proceedings concern distinct infractions, the same would not constitute a "same subject matter" even if the tax liability, deficiency, or obligation is same or similar, and the bar under Section 6(2)(b) would not be attracted. x. The twofold test for determining whether a subject matter is "same" entails, first, determining if an authority has already proceeded on an identical liability of tax or alleged offence by the assessee on the same facts, and secondly, if the demand or relief sought is identical. 97. We issue the following guidelines to be followed in cases where, after the commencement of an inquiry or investigation by one authority, another inquiry or investigation on the same subject matter is initiated by a different authority. a. Where a summons or a show cause notice is issued by either the Central or the State tax authority to an assessee, the assessee is, in the first instance, obliged to comply by appearing and furnishing the requisite response, as the case may be. We say, so because, mere issuance of a summons does not enable either the issuing authority or the recipient to ascertain that proceedings have been initiated. b. Where an assessee becomes aware that the matter being inquired into or investigated is already the subject of an inquiry or investigation by another authority, the assessee shall forthwith inform, in writing, the authority that has initiated the subsequent inquiry or investigation. c. Upon receipt of such intimation from the assessee, the respective tax authorities shall communicate with each other to verify the veracity of the assessee's claim. We say, so as this course of action would obviate needless duplication of proceedings and ensure optimal utilization of the Department's time, effort, and resources, bearing in mind that action initiated by one authority enures to benefit of all. d. If the claim of the taxable person regarding the overlap of inquiries is found untenable, and the investigations of the two authorities pertain to different "subject matters", an intimation to this (4 of 5) [CW-18618/2023] effect, along with the reasons and a specification of the distinct subject matters, shall be immediately conveyed in writing to the taxable person. e. The taxing authorities are well within their rights to conduct an inquiry or investigation until it is ascertained that both authorities are examining the identical liability to be discharged, the same contravention alleged, or the issuance of a show cause notice. Any show cause notice issued in respect of a liability already covered by an existing show cause notice shall be quashed. f. However, if the Central or the State tax authority, as the case may be finds that the matter being inquired into or investigated by it is already the subject of inquiry or investigation by another authority, both authorities shall decide inter-se which of them shall continue with the inquiry or investigation. In such a scenario the other authority shall duly forward all material and information relating to its inquiry or investigation into the matter to the authority designated to carry the inquiry or investigation to its logical conclusion. We say, so because, the taxable person except for being afforded the statutory protection from duplication of proceedings, otherwise has no locus to claim which authority should proceed with the inquiry or investigation in a particular matter. g. However, where the authorities are unable to reach a decision as to which of them shall continue with the inquiry or investigation, then in such circumstances, the authority that first initiated the inquiry or investigation shall be empowered to carry it to its logical conclusion, and the courts in such a case would be competent to pass an order for transferring the inquiry or investigation to that authority. h. If it is found that the authorities are not complying with these aforementioned guidelines, it shall be open to the taxable person to file a writ petition before the concerned High Court under Article 226 of the Constitution of India. i. At the same time, taxable persons shall ensure complete cooperation with the authorities. It is incumbent upon them to appear in response to a summons and/or reply to a notice. (5 of 5) [CW-18618/2023] Considering the law as laid down by the Supreme Court in the case of M/s. Armour Security (India) Ltd. (supra), we are unable to accept the contentions raised by counsel for the petitioner that the State Authorities are barred from issuing notice u/s 6(2)(b) of the CGST Act, 2017 and the action taken by the State Authorities would, therefore, be in accordance with law. The writ petitions are found to be misconceived and the same are accordingly, dismissed. However, the petitioner shall be free to take up all the contentions before the authorities as observed in M/s. Armour Security (India) Ltd. (supra) especially in terms of para No.97 of the judgment. (SANJEET PUROHIT),J (SANJEEV PRAKASH SHARMA),J Brijesh 95-96.