Facts of the Case

M/s Balaji Metal Industries challenged a show cause notice dated 17.06.2025 issued under Section 74 of the CGST/UPGST Act by the Additional Commissioner (Anti-Evasion), Central GST, for the tax period April 2018 to March 2024, before the Allahabad High Court. The petitioner's grievance was that show cause notices for financial years 2018-19, 2019-20, 2020-21 and 2022-23 had already been issued by, and assessment for 2018-19 was being completed by, the U.P. State GST authorities — so, it argued, the Central GST authority could not issue a fresh notice for the same periods.

Issues Involved

  1. Whether a Central GST show cause notice issued under Section 74 can be quashed at the threshold on the ground that State GST authorities have already initiated or are completing proceedings for overlapping tax periods.
  2. Whether such a cross-empowerment objection under Section 6(2)(b) of the CGST Act is more appropriately raised before, and decided by, the adjudicating authority rather than the writ court.

Petitioner's Arguments

  • Since show cause notices for the same financial years had already been issued and were being adjudicated by the State GST authority, the Central GST authority was barred by Section 6(2)(b) of the CGST Act from separately proceeding for the same periods, warranting quashing of the impugned notice.

Respondent's Arguments

  • No specific counter-argument is recorded beyond the Bench's own view that the objection should be examined by the adjudicating authority itself rather than resolved by the writ court at the notice stage.

Court Order / Findings

  • The Court held that since the matter was only at the show cause notice stage, the cross-empowerment objection based on Section 6(2)(b) should be raised by the petitioner in its reply/objection, and the concerned authority should consider it before proceeding further.
  • Rather than quashing the notice, the Court directed the CGST authority to decide the petitioner's already-filed representation within one month, after granting an opportunity of hearing, without going into the merits of the case at this writ stage.

Important Clarification

  • An objection that a Central GST authority is barred by Section 6(2)(b) from proceeding where State GST authorities have already initiated action for the same tax period on the same subject matter should ordinarily be raised at the reply stage before the adjudicating authority, not used to quash the notice in writ jurisdiction at the threshold.
  • Courts are reluctant to interfere with a show cause notice before the authority has had the opportunity to rule on jurisdictional objections raised by the noticee, preferring a time-bound direction to decide the objection first.

Sections Involved

  • Section 74, CGST/UPGST Act, 2017 – provision under which the impugned show cause notice was issued, alleging fraud/suppression.
  • Section 6(2)(b), CGST Act, 2017 – bars a proper officer under one Act (Central/State) from initiating proceedings on a subject matter already under proceedings by a proper officer under the other Act.

Decision – In Favour of

The writ petition was disposed of without a ruling on merits either way; the petitioner's cross-empowerment objection remains to be decided by the CGST authority itself, making the outcome procedurally neutral pending that decision.

Case Details

Court: High Court of Judicature at Allahabad. Case No.: Writ Tax No. 3387 of 2025. Neutral Citation: 2025:AHC:134146-DB. Coram: Hon'ble Mr. Justice Shekhar B. Saraf and Hon'ble Mr. Justice Praveen Kumar Giri. Date of Order: 7th August, 2025.

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