Dual GST proceedings by both Central and State authorities held invalid; matter remitted for fresh adjudication with liberty to seek amnesty relief.

Case Title: M/s Fortune Healthcare Services v. Assistant Commissioner of Commercial Taxes & Ors.
Court: High Court of Karnataka, Bengaluru
Petition Number: W.P. No. 30042 of 2024 (T-RES)
Date of Judgment: 20 March 2025
Category: Parallel Proceedings / Amnesty Scheme under Section 128A
Relevant Sections: Sections 6(2)(b), 73(1), 73(5), 73(9), 50, 122, and 128A of the CGST/KGST Acts; Sections 4, 5, and 20 of the IGST Act; Rule 6 and Rule 142(5) of CGST/KGST Rules, 2017.

Facts (Paras 2–3)

M/s Fortune Healthcare Services, a partnership firm in Mangaluru, was subjected to separate proceedings by two different authorities for the same tax period 2018–19. The Assistant Commissioner (Respondent No.1) issued a pre-intimation under Section 73(5) on 30.03.2023, followed by a Show Cause Notice (SCN) dated 13.12.2023. Simultaneously, the Deputy Commissioner (Respondent No.2) issued a similar intimation on 23.11.2023 and an SCN on 19.12.2023, culminating in two separate adjudication orders dated 06.03.2024. Aggrieved by this dual adjudication and refusal to rectify errors, the petitioner approached the Court.

Questions Before the Court

Whether simultaneous or parallel proceedings by both the Central and State tax authorities for the same tax period and same issue are permissible under Section 6(2)(b) of the CGST/KGST Acts.

Court’s Observations (Paras 4–6)

The Court observed that Section 6(2)(b) explicitly prohibits parallel proceedings by both Central and State authorities. Once one authority initiates proceedings, the other is precluded from doing so for the same matter. Both authorities issuing SCNs and adjudication orders for the same year constituted dual and impermissible action.
The Court further held that such duplication violated the spirit of administrative coordination intended under the GST framework.

Judgment (Para 7)

The Court allowed the writ petition and held as follows:

1. Both the intimation, SCN, and order dated 06.03.2024 issued by the Assistant Commissioner were quashed.

2. The orders dated 06.03.2024 passed by the Deputy Commissioner were also quashed.

3. The matter was remitted to the Deputy Commissioner to reconsider the case afresh from the stage of SCN dated 19.12.2023, ensuring compliance with Section 73(9).

4. The petitioner shall appear before the Deputy Commissioner on 24.03.2025, and orders must be passed by 26.03.2025.

5. The petitioner may subsequently apply for benefit under Section 128A (GST Amnesty Scheme), which the authority must consider expeditiously.

6. The order was passed based on the peculiar facts of this case and shall not serve as precedent.

Summary of Cases Referred

Between Fine Lines (Practical Takeaway)

The judgment reinforces that only one authority—either Central or State—can conduct proceedings for a given taxpayer and period. Once proceedings are initiated by one, any parallel action by another is void ab initio. This ensures administrative discipline and prevents harassment through multiple notices. Businesses can rely on this principle when confronted with overlapping actions, and they may also claim amnesty relief after rectification.

Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”