DGST Cannot Proceed When CGST Has Already Adjudicated on Same Matter

Case Details:

• Case Name: M/s Sun Automation Limited v. Sales Tax Officer Class II/AVATO & Ors.

• Court: High Court of Delhi

• Petition No.: W.P.(C) 5734/2025 & CM APPL. 26164/2025

• Date of Judgment: 01.05.2025

• Relevant Sections: Section 6(2)(b) of the CGST Act, 2017

• Category of Dispute: Jurisdictional Overlap – Parallel Proceedings under CGST and SGST

• Tax Period: April 2020 – March 2021

Facts of the Case (Para 3–7)

1. The petitioner challenged a DGST show cause notice (27.11.2024) and order (27.02.2025) raising a tax and penalty demand of ₹157.66 crore relating to transactions with M/s Microlyte Energy Pvt. Ltd. and M/s Jetibai Grandsons Services India (P) Ltd.

2. The petitioner argued that under Section 6(2)(b) CGST Act, once the CGST Department had adjudicated the same issue, the DGST Department could not initiate fresh proceedings.

3. CGST proceedings had already culminated in an appellate order dated 03.04.2025 by Commissioner (Appeals-I), CGST, which also imposed a penalty.

Question(s) in Consideration (Para 5–8)

• Whether the DGST Department can issue a SCN and adjudicate a matter already adjudicated by the CGST Department on the same subject matter, in light of Section 6(2)(b) CGST Act.

Observation of the Court (Para 9–10)

1. Section 6(2)(b) CGST Act aims to prevent parallel proceedings by CGST and SGST officers on the same subject matter.

2. Referred to Amit Gupta v. Union of India (W.P.(C) 8625/2022), where it was held that this provision must be purposively interpreted to avoid multiplicity of proceedings.

3. DGST must consider the appellate order of 03.04.2025 and then re-evaluate whether their SCN and impugned order can be sustained.

Judgment of the Court (Para 11–12)

• The impugned DGST order dated 27.02.2025 was set aside.

• Directed that the CGST appellate order dated 03.04.2025 be placed before DGST for fresh consideration.

• DGST to grant a personal hearing to the petitioner before passing a fresh order.

• Petition disposed of accordingly.

Between Fine Lines

In simpler terms:

1. Both DGST and CGST cannot run parallel cases for the same matter.

2. If CGST has already decided, DGST must step back.

3. Delhi HC reminded DGST to check CGST’s appellate decision first.

4. The earlier DGST order was scrapped.

5. Fresh proceedings, if any, must follow proper jurisdictional checks.

Summary of Referred Cases

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