Case Summary
Case Title: M/s Prime Steel Industries Pvt. Ltd. v. State of Himachal Pradesh and another
Court: High Court of Himachal Pradesh, Shimla
Petition No.: CWP No.616 of 2025
Category: Jurisdiction – Parallel Proceedings, Blocking of ITC Ledger
Date of Judgment: 1st May, 2025
Relevant Provisions: Section 6(2)(b) and Section 70 of the CGST Act, 2017; CGST/HPGST Rules, 2017
Facts (Paras 1–3)
The petitioner, M/s Prime Steel Industries Pvt. Ltd., challenged parallel proceedings initiated by both the State Tax Authority and the Directorate General of GST Intelligence (DGGI), Meerut. Respondent No.2 (DGGI) had issued summons dated 13.12.2024 under Section 70 CGST Act and blocked the petitioner’s ITC ledger on 01.01.2025. The petitioner contended that such action violated Section 6(2)(b) of the CGST Act, which bars initiation of proceedings by a second authority once one authority is already seized of the matter. Earlier, respondent No.1 (State GST authority) had issued summons in August 2021, and proceedings were already pending (Paras 1–3).
Questions before Court
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Whether dual proceedings could be initiated simultaneously by State GST and DGGI despite Section 6(2)(b) CGST Act.
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Whether blocking of the ITC ledger pursuant to such parallel summons was legally sustainable.
Observations (Paras 3–6)
The Court noted that the State authority had initiated proceedings in 2021, well before the DGGI’s summons of December 2024. It was further recorded that the DGGI, vide communication dated 28.02.2025, had already transferred the investigation to the State authority. The Court also noted the affidavit confirming that the ITC ledger, which had been blocked, was subsequently unblocked after transfer of investigation (Paras 4–6).
Judgment (Paras 5–7)
The Bench (Justice Tarlok Singh Chauhan and Justice Sushil Kukreja) held that since the DGGI had already transferred the case to the State GST authority, the issue of parallel proceedings no longer survived. The ITC ledger was also unblocked. Accordingly, the writ petition was disposed of as having achieved its purpose, along with pending applications.
Case Law Reference Table
| Case Referred | Citation | Verdict / Principle |
|---|---|---|
| Prime Steel Industries Pvt. Ltd. v. State of H.P. (current case) | CWP No.616/2025, H.P. HC | Parallel proceedings under CGST Act impermissible; once transferred, case continues with first authority; ITC block lifted. |
Between Fine Lines
For businesses, this ruling reaffirms that once one authority initiates GST proceedings, another cannot start parallel action under Section 6(2)(b) CGST Act. Taxpayers facing double jeopardy through overlapping summons can seek relief. Moreover, the Court reiterated that blocking of ITC without jurisdiction cannot sustain, ensuring operational liquidity is protected.
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