Delhi High Court Quashes State GST Order Citing Overlapping Proceedings With CGST Authority

The Delhi High Court has quashed an order passed by the State GST Authority against an engineering firm, holding that in the facts of the case, where proceedings had already been initiated earlier by the Central GST authority and involved overlapping entities, the State authority ought not to have proceeded further having regard to the mandate of Section 6 of the Central Goods and Services Tax Act, 2017.

A Division Bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul was dealing with a challenge to an order dated December 18, 2025, passed by the State GST officer based on a demand-cum-show cause notice dated July 2, 2025.

The petitioner, Maa Jagdambe Engineering Works, contended that prior to this, the Central GST authority had issued a show cause notice on June 28, 2025 covering 17 entities, of which nine overlapped with those forming part of the State proceedings.

It was argued that despite being informed of this position, including through a communication dated July 22, 2025, the State authority proceeded to adjudicate the matter without addressing the objection based on Section 6 of the CGST Act.

The Court noted that the existence of overlapping entities between the two notices was not in dispute and that the Central GST notice was earlier in point of time.

“The said fact was very much brought to the notice of respondent no.2 by the petitioner through a communication dated 22nd July, 2025, which is placed on record at page nos.174 and 175 as Annexure P-4. This objection has not been dealt with by respondent no.2 in the impugned order," the court observed.

Dealing with the State's contention that the details of the Central GST proceedings had not been furnished, the Bench observed that the material was available on the GST portal, which was accessible to both authorities.

“In such an eventuality, in our opinion, respondent no. 2, having regard to the statutory mandate of Section 6 of the CGST Act, is duty-bound to examine the said portal so as to ascertain the material available on record.” the court said.

The court further noted that the overlap of entities covered under the Central GST show cause notice was borne out from the record and was not in dispute.

In this backdrop, the court quashed and set aside the impugned order dated December 18, 2025. It also directed that the State GST show cause notice dated July 2, 2025 be kept in abeyance.

The bench further directed the Central GST authority to complete adjudication proceedings against the petitioner within four months and clarified that thereafter it would be open to the State authority to take an appropriate decision on its show cause notice in accordance with law, having regard to Section 6 of the CGST Act.

For Petitioner: Advocates Anurag Kishore, (AOR) with Ritika Srivastava, Lakhan Kr. Mishra

For Respondents: Advocates Vishal Chadha, Senior Standing Counsel for R/CGST Advocates Sumit K. Batra and Priyanka Jindal, Advocates for R-GNCTD