Authority: High Court of Himachal Pradesh, Shimla

Order Date: 16 July 2026

Case Overview

  • Petitioner: M/s H.M. Steels Ltd; Respondents: Union of India and other authorities.
  • The petitioner sought (i) a writ of mandamus to restrain further action on Show‑Cause Notice No. DIN 20830250ZB000061616B and DRC‑01 notices for assessment years 2017‑18 through 2023‑24, alleging they were issued without ASMT‑10 and without factual/legal verification; (ii) a writ of certiorari to quash the notices denying Input Tax Credit (ITC).
  • The petitioner submitted that it had already paid GST to sellers, possessed all documents required for claiming ITC, and should not be compelled to prove whether the seller discharged its tax liability.
  • Show‑Cause Notices challenged: DRC‑01 Summary Notices dated 28‑09‑2022 (Annexures P‑2, P‑3), 24‑02‑2023 (P‑5), 18‑09‑2023 (P‑6), 21‑05‑2024 (P‑7, P‑8), 31‑05‑2024 (P‑9) issued by the State of Himachal Pradesh; and a Central Authority notice dated 23‑02‑2023 (Annexure P‑4).
  • The petitioner requested fresh consideration of its objections with supporting documents, focusing on whether GST on purchases was actually paid, the genuineness of transactions, timing relative to supplier registration cancellation, and compliance with supplier identity verification.
  • The learned Advocate General and Senior Counsel argued that a fresh response filed before the competent authority should be decided within a reasonable time.
  • The court noted that the matter is no longer res integra, referencing the Supreme Court judgment in M/s Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East & Anr. (AIR 2025 SC 3854; (2025) SCC Online 1700), which provides binding guidance on the scope of “initiation of proceedings”, “subject‑matter”, and the inter‑relationship between Central and State GST authorities.

Supreme Court Guidelines (Paragraphs 96‑97)

  • Section 6(2)(b) CGST Act bars initiation of any proceedings on the same subject‑matter by another tax authority.
  • Intelligence‑based enforcement may be initiated by either Central or State authority, but parallel proceedings are prohibited once one authority has commenced such action.
  • “Initiation of proceedings” refers to the formal issuance of a show‑cause notice, not to summons, searches, or seizures.
  • The “subject‑matter” is the tax liability, deficiency, or obligation arising from a particular contravention.
  • A two‑fold test determines sameness of subject‑matter: (a) identical liability/facts, and (b) identical demand or relief sought.
  • Guidelines a‑i outline procedural steps when overlapping inquiries arise, including the duty of the assessee to inform the other authority, inter‑authority communication, and the mechanism for deciding which authority will continue the inquiry.

Final Outcome

  • The writ petition is disposed of with the direction that H.M. Steels Ltd must submit its reply to the show‑cause notices (Annexures P‑2 to P‑9) along with all supporting documents to both the Central and State Tax Authorities on or before 18 August 2026.
  • Upon receipt, if the notices/summons/SCNs issued by the two authorities pertain to the same subject‑matter, the authorities shall, within four weeks, decide inter se which authority will continue the proceedings, as per the Armour Security guidelines.
  • The authority designated to proceed shall consider the petitioner’s reply and the observations recorded in paragraphs 3 & 5 of this order, and must pass a speaking and reasoned order within six weeks from the date of the inter‑authority decision.
  • The petition is disposed of on these terms, together with any pending applications.

Topics: GST Input Tax Credit, Duplicate Tax Proceedings