Summons ≠ "Proceedings": Delhi HC clarifies Section 6(2)(b) CGST bar in Armour Security India Ltd. v. Commissioner, CGST
Citation: 2025(02)LCX0398; Delhi High Court,
TL;DR (Why this case matters)
Section 6(2)(b) of the CGST Act bars parallel assessment-type proceedings by one GST authority when the other has already initiated proceedings on the same subject matter. The Delhi High Court holds that this bar does not extend to search-driven investigations and summons issued by CGST-even if State GST has already issued show-cause notices (SCNs) or passed orders under Sections 73/74. A summons after a search is merely a prelude to possible proceedings, not a barred "proceeding" in itself. The Court, however, facilitated taxpayer participation by allowing the petitioner to seek copies of seized electronic data.
Background & Procedural Timeline
16 Jan 2024 & 11 Jul 2024: State GST authorities pass orders referable to Section 73 for earlier periods.
18 Nov 2024: State GST issues an SCN-those proceedings remain pending.
16 Jan 2025:CGST conducts a search.
16 Jan 2025 & 23 Jan 2025: CGST issues summons seeking appearance/documents.
Feb 2025:Armour Security India Ltd. files writ to quash summons, seeks transfer to State, and release/return of seized devices.
The core legal lever was Section 6(2)(b), under which the petitioner argued that because State GST had already initiated and even concluded certain proceedings, CGST could not begin any proceeding on the same subject.
Issues
1. Does Section 6(2)(b) bar CGST from issuing search-related summons where State GST has already initiated/advanced Section 73 proceedings on the same subject matter?
2. Are summons and investigations "proceedings" within Section 6(2)(b)?
3. What procedural protections does an assessee enjoy concerning seized electronic data?
Holding
1. No bar on summons/investigation. Section 6(2)(b) aims to prevent parallel assessment or adjudication on the same subject matter-not to prohibit search, investigation, or summons which are precursors to proceedings.
2. Summons are not "proceedings" as envisaged by Section 6(2)(b). An investigative summons is qualitatively distinct from assessment under Sections 73/74.
3. Limited relief: The Court dismissed the challenge to summons but granted liberty to the petitioner to approach CGST for copies of data from the seized electronic devices to enable effective participation in the investigation.
Court’s Reasoning (In Depth)
1) Scope and purpose of Section 6(2)(b)
The text of Section 6(2)(b) prevents initiation of proceedings by one authority when another authority has already initiated proceedings on the same subject matter.
The Court reads "proceedings" in context: the provision is designed to avoid duplicative adjudication (e.g., assessments/demands under Sections 73/74, penalty proceedings, etc.) by two distinct arms (State and Central) on the same controversy.
Key takeaway: Section 6(2)(b) synchronizes adjudication, not investigation.
2) Investigative acts vs. adjudicatory acts
A search may unearth new material unknown during the earlier assessment/SCN stage.
A summons post-search is an information-gathering tool-it does not itself constitute a taxable determination, nor does it predetermine whether CGST will proceed under Section 73 (non-fraud) or Section 74 (fraud/suppression).
Treating summons as a barred "proceeding" would hamstring legitimate investigation into fresh material that could reveal non-disclosure or misrepresentation in prior State proceedings.
Analytical point: The Court draws a clean line between investigation (permissible and non-barred) and adjudication (barred if already initiated elsewhere on the same subject).
3) "Same subject matter" and the chain-of-events theory
The petitioner leaned on Vivek Narsaria v. State of Jharkhand to say all steps are interrelated; hence, once State moves, Centre must back off.
The Delhi High Court distinguished Vivek Narsaria: there, both authorities were actively pursuing the same ITC-reversal dispute, creating a parallel inquiry scenario.
In Armour Security, the CGST search and summons came post State action, and the Court emphasized that post-search investigation cannot be presumed to be the same as prior assessment on record-particularly where new material might be at play.
Bottom line:Vivek Narsaria is fact-specific and not a blanket bar; Armour Security narrows 6(2)(b) to assessment-type duplication, not investigative steps.
4) Practical safeguard-access to data
Recognizing due process needs, the Court allowed the petitioner to seek copies of the seized electronic data so that the assessee can respond meaningfully to the investigation.
This balances investigative prerogative with natural justice.
What this means for taxpayers
1. You can’t quash summons merely because State GST is already "on it." If CGST conducts a search, they can summon documents/statements even when a State SCN is pending or State orders exist.
2. The real 6(2)(b) shield activates at the adjudication stage. If both authorities proceed to adjudicate the same subject matter (e.g., demand under 73/74), that is where duplication can be challenged.
3. Demand clarity on "subject matter." Keep a tight dossier mapping periods, tax heads, transactions, and allegations to show when two authorities are truly overlapping on adjudication.
4. Ask for data copies early. If devices/data are seized, formally request mirror images/certified copies, citing the Delhi HC’s liberty principle, to prepare your defense.
5. Prepare for potential 74 thresholds. If, after investigation, CGST seeks to invoke Section 74, they still must establish elements like fraud/suppression; Armour Security does not relax those standards.
What this means for the department
1. Investigate freely; adjudicate carefully. Searches and summons are fine despite prior State action. But coordinate before moving to demand/adjudication to avoid a 6(2)(b) hit.
2. Document "subject matter" distinctions. If CGST proceeds after State action, demonstrate why the post-search material is different/new (new entities, transactions, periods, or fresh evidence).
3. Facilitate data access. Provide copies of seized data upon request to forestall natural justice challenges and ensure smoother investigations.
Doctrinal clarifications emerging from Armour Security
Meaning of "proceedings" in Section 6(2)(b): The Court indicates a substantive, adjudicatory flavour-primarily Sections 73/74, not search/summons.
Temporal logic matters: A post-assessment search may uncover facts that reopen the merits or lead to a separate cause of action; the law should not block that at the investigative stage.
Harmonization with federal design: Dual authorities can investigate; duplication is policed at the decision-making (assessment/demand) point.
Practical Playbook for Businesses & Counsel
1. Map All Proceedings: Maintain a live matrix of State vs Central actions by period, issue, section, and status. This is essential to frame (or resist) a 6(2)(b) objection at the right time.
2. Don’t stonewall summons. Participate, but record objections (if any) and reserve rights under 6(2)(b) for later-if and when adjudicatory duplication occurs.
3. Seek data copies with specificity: Identify devices, date of seizure, hashing/mirroring requirements, and chain-of-custody expectations.
4. Anticipate a bifurcated path: (a) Investigation now; (b) Adjudication later. Your legal strategy should differentiate arguments suitable for each stage.
5. Subject-Matter Defense: If a CGST demand later mirrors an ongoing State 73/74 action on the same facts/periods, be ready to invoke 6(2)(b) with a granular comparison.
How Armour Security interacts with other strands of Section 6(2)(b) jurisprudence
Some High Courts have stressed that prior initiation by one authority can bar fresh initiation by another on the same subject matter, especially where there is true parallel adjudication.
This judgment does not negate that line; it refines the bar to substantive proceedings, leaving room for investigation-particularly following a new search with potential new evidence.
Expect future litigation to pivot on what counts as "the same subject matter" and when investigation morphs into barred adjudication.
Counsel Corner: Drafting & Advocacy Tips
When defending against summons post-State action:
Avoid an all-or-nothing 6(2)(b) stance at the investigative stage.
Press for data access, reasonable timelines, and clarity about scope.
Put the department on notice that any future adjudication overlapping with State 73/74 on the same matrix will be pressed as a barred duplicate proceeding.
When advising departments:
Keep a paper trail distinguishing issues/periods/evidence.
Consider administrative coordination (e.g., transferring material) where overlap is undeniable to avoid later quashment.
Be ready to justify Section 74 invocation with concrete thresholds; Armour Security grants no shortcut.
The Court’s Operative Directions
Petition dismissed. No quashing of summons.
Liberty granted to the taxpayer to approach the competent CGST authority for copies of the seized electronic data to enable effective participation in the investigation.
Concluding Analysis
Armour Security is a clarifying precedent for the CGST-State GST interface under Section 6(2)(b). It steers the discourse away from a blanket embargo on post-State-action steps by CGST and anchors the statutory bar where it belongs-duplicative adjudication, not investigation. For taxpayers, the message is twofold: cooperate with legitimate summons post-search, and preserve a precise, documentary trail to mount a 6(2)(b) challenge only when the matter ripens into parallel demands on the same subject matter. For authorities, the judgment endorses investigative latitude but warns against adjudicatory overlap. In India’s dual-GST architecture, that balance-investigate wide, adjudicate once-is exactly what Section 6(2)(b) was crafted to achieve.
Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.