Section 6(2)(b) of CGST Act Bars Parallel Adjudication: Himachal Pradesh High Court Mandates Compliance with Armour Security Guidelines

In a significant ruling aimed at streamlining tax compliance and preventing regulatory harassment, the High Court of Himachal Pradesh at Shimla has addressed the contentious issue of parallel proceedings initiated by Central and State GST authorities. The bench, comprising Justice Vivek Singh Thakur and Justice Sushil Kukreja, emphasized that taxpayers cannot be subjected to multiple adjudicatory processes for the same subject matter under the Central Goods and Services Tax (CGST) Act, 2017.

The Conflict of Jurisdictions

The petitioner, M/s J.B. Rolling Mills Limited , moved the High Court challenging notices and summons issued by Central GST authorities. The primary contention was that the State GST authority had already initiated inquiries into the same subject matter. Invoking the protection offered by Section 6(2)(b) of the CGST Act, the petitioner sought to quash the subsequent notices issued by the Central authorities, arguing that the law explicitly prohibits duplicate proceedings.

The Standard of 'Armour Security'

The Court’s decision is deeply rooted in the recent Supreme Court judgment in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr. (2025). The apex court had clarified the scope of Section 6(2)(b), providing clear guidelines for authorities to ensure that investigations do not descend into duplicative litigation.

Justice Vivek Singh Thakur, writing for the High Court, noted that the respondent authorities had explicitly agreed to abide by the statutory mandate and the principles laid down in the Armour Security ruling. The court underscored that while investigative steps—such as summons—are permissible as part of a probe, once an authority initiates formal adjudicatory proceedings, other authorities are barred from initiating similar processes for the same contravention.

Key Observations

The Court highlighted several essential principles derived from the Armour Security precedent, emphasizing the need for inter-departmental communication:

• On the reach of Section 6(2)(b): "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."
• On the responsibility of the taxpayer: "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."
• On the coordination between authorities: "Both authorities shall coordinate to ensure that the assesse is not subjected to multiple adjudicatory processes on the same subject matter by following verdict of the Armour Security case."

The Road Ahead for Tax Compliance

Rather than quashing the notices outright, the Himachal Pradesh High Court disposed of the petition with a clear procedural roadmap. The Court directed M/s J.B. Rolling Mills Limited to appear before both the Central and State authorities by December 15, 2025, to submit their responses and documentation.

Following this, the State and Central authorities are mandated to communicate with each other to verify the overlap of claims. If they determine that the proceedings cover the same ground, they must decide inter se which authority will continue the inquiry to its logical conclusion, thereby avoiding the redundancy that leads to legal uncertainty for businesses.

This judgment serves as a vital reminder to tax administrations that their investigative reach, while broad, is bounded by the statutory necessity to prevent multiple prosecutions for a single alleged tax infraction. By fostering better coordination between Central and State regulators, the High Court has reinforced the protective shield intended by the CGST Act for honest taxpayers.