Separate GST Proceedings Not Barred If Subject Matter Is Different: Delhi High Court

The Delhi High Court has held that separate GST proceedings against a taxpayer are not barred under Section 6(2)(b) of the Central Goods and Services Tax Act, 2017, where the allegations, material relied upon and nature of the alleged defaults in the two proceedings are different.

The Division Bench of Justices Anil Kshetarpal and Bharat Parashar made the observation while dealing with a petition filed by Star Traders challenging proceedings initiated by the GST authorities for alleged wrongful availment and passing on of Input Tax Credit (ITC).

Petitioner had contended that the proceedings were barred under Section 6(2)(b) of the CGST Act since proceedings concerning the same subject matter had already been initiated by another GST authority.

The Court, however, rejected the contention, noting that Section 6(2)(b) would apply only where proceedings under the State GST enactment had been initiated earlier and the subject matter of both proceedings was the same.

In the present case, the Court found that the proceedings initiated by one authority concerned alleged wrongful availment of ITC on inward supplies, arising from reconciliation of the turnover declared by the petitioner in its GSTR-3B returns for FY 2017-18.

The proceedings initiated by the other authority on the other hand were based on intelligence gathered by the Department and material obtained during a search conducted at Petitioner's premises.

The Court further noted that the adjudication order recorded allegations that Petitioner had issued invoices without any corresponding supply of goods, was not carrying out actual business activity, and had suppliers who were either non-existent or whose registrations were subsequently cancelled retrospectively.

The show cause notice alleged wrongful availment and utilisation of ITC amounting to ₹3.53 crore and passing on of ITC amounting to approximately ₹3.25 crore through invoices issued without corresponding supply of goods.

"Thus, the allegations, the material relied upon and the nature of the default are different in the two proceedings. In particular, the allegation of passing on ITC through invoices issued without any corresponding supply of goods has no connection with the reconciliation of turnover," the Court observed.

Accordingly, the Court held that the subject matter of the two proceedings could not be treated as the same and therefore the statutory bar under Section 6(2)(b) was not attracted.

The Court also declined to entertain Petitioner's challenge to the constitutional validity of Section 16(2)(c) of the CGST Act.

It noted that the Gujarat High Court had, in May 2026, upheld the constitutional validity of the provision in Maruti Enterprise v. Union of India. The Supreme Court subsequently affirmed that view in July 2026 in Bhandari Scrap Traders v. Union of India.

"In view of the position being settled by the Supreme Court, we are not inclined to interfere with the same and find no reason to take a different view," the Court said.

For Petitioner: Advocates Rakesh Kumar, Parveen Kumar Gambhir, Naveen

For Respondents: Aakarsh Srivastava, Senior Standing Counsel with Ashish Bansal, Anand Pandey, Advs. for R-1. Advocates Sumit K. Batra, Priyanka Jindal for GNCTD.  Advocate Rishabh Sahu, SPC for UOI.