Gujarat High Court remands overlapping GST demand raised in parallel Central and State proceedings

Background and procedural history

Shree Maruti Stone Industries Vs Assistant Commissioner (Gujarat High Court) concerned a challenge to:

  • a notice dated 02.08.2025, and
  • a consequential order dated 25.01.2025,

both issued by the Central GST authorities.

The assessee argued that these Central proceedings contravened section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act) because the same tax periods were already subject to proceedings by the State GST authorities.

At the very outset of the hearing, counsel representing both sides jointly suggested that, in light of an affidavit dated 26.11.2025 filed by the respondents—specifically paragraph 14 of that affidavit—the matter could appropriately be remanded to the departmental authorities for a fresh decision.

The primary question before the Gujarat High Court was whether the Central authorities could issue and sustain a consolidated demand that included financial years already under adjudication by the State GST authorities, in view of section 6(2)(b) of the CGST Act.

The assessee challenged the impugned notice and order on the specific ground that they violated the statutory bar in section 6(2)(b), which regulates situations where more than one authority under the GST regime seeks to proceed on the same subject matter.

Reliance on Supreme Court decision in Armour Security

Petitioner’s submissions

Learned advocate Mr. Desai, appearing for the assessee, placed firm reliance on the judgment of the Supreme Court in:

M/s. Armour Security (India) Limited vs. Commissioner, CGST, Delhi East Commissionerate and Anr., (2025) 33 Centax 222 (S.C.)

The assessee particularly emphasised paragraphs 96 and 97 of the said judgment, contending that the ratio laid down by the Supreme Court directly governed the controversy under section 6(2)(b) in the present case.

Stand of the revenue

Learned Senior Standing Counsel Mr. Lakhani, representing the revenue, candidly accepted that the legal issue raised was already determined by the Supreme Court in M/s. Armour Security (India) Limited vs. Commissioner, CGST, Delhi East Commissionerate and Anr. and that the matter was no longer res integra.

Interpretation of Section 6(2)(b) by the Supreme Court

The Gujarat High Court noted the principle laid down by the Supreme Court while examining section 6(2)(b) of the CGST Act in M/s. Armour Security (India) Limited vs. Commissioner, CGST, Delhi East Commissionerate and Anr.. The Supreme Court clarified the scope of overlapping proceedings as follows:

  • Where proceedings initiated by two different departments or authorities overlap with respect to the same tax liability, deficiency or obligation arising out of a particular contravention, the bar under section 6(2)(b) is attracted.
  • However, where proceedings, even by different authorities, relate to distinct infractions, they are not barred by section 6(2)(b) merely because the resulting tax liability or deficiency may appear similar in amount or nature.

This distinction between overlapping proceedings on an identical subject matter and proceedings for separate contraventions formed the legal backdrop against which the High Court evaluated the case of Shree Maruti Stone Industries.

Contents of the respondents’ affidavit – admission of overlap

After the issuance of the show cause notice, the respondents filed an affidavit-in-reply in the writ proceedings. In paragraph 14 of this affidavit dated 26.11.2025, the respondents themselves addressed the issue of potential overlap between State and Central actions.

The affidavit expressly recorded that: