Summary and Analysis of M/s Armour Security India Ltd vs Commissioner CGST Delhi East Commissionerate & Anr

1. Heading of the Judgment

M/S Armour Security (India) Ltd. vs. Commissioner, CGST, Delhi East Commissionerate & Anr.
(Supreme Court of India, Civil Appellate Jurisdiction, SLP(C) No. 6092 of 2025)

Citation:
M/S Armour Security (India) Ltd. vs. Commissioner, CGST, Delhi East Commissionerate & Anr., (2025) INSC 982.

Judges: J.B. Pardiwala and R. Mahadevan, JJ.
Date: August 14, 2025.

2. Related Laws and Sections

The judgment interprets:

• Section 6(2)(b) of the Central Goods and Services Tax Act, 2017 (CGST Act):
  Prohibits parallel proceedings by Central and State GST authorities on the "same subject matter."

• Section 70 of the CGST Act:
  Empowers tax authorities to issue summons for inquiry.

• Relevant Circulars:
  Circular dated 05.10.2018 (intelligence-based enforcement).
  Circular No. 01/2017 (administrative division of taxpayers).

3. Basic Judgment Details

• Parties:
  Petitioner: M/S Armour Security (India) Ltd. (GST-registered security services provider).
  Respondents: Commissioner, CGST Delhi East, and State GST authority.

• Issue:
  Whether issuance of summons under Section 70 CGST Act amounts to "initiation of proceedings" under Section 6(2)(b), barring parallel inquiries by CGST and SGST authorities on the same subject matter.

• High Court’s Decision (Impugned):
  Dismissed the writ petition, holding that summons under Section 70 do not constitute "proceedings" under Section 6(2)(b).

• Supreme Court’s Decision:
  Dismissed the Special Leave Petition, upholding the High Court’s view.

4. Explanation of the Judgment

A. Factual Matrix

• The petitioner received a show-cause notice (18.11.2024) from State GST authorities under Section 73 CGST Act for tax evasion (2019-2020).

• CGST authorities conducted a search (16.01.2025) and issued summons (Sections 67/70 CGST Act) to directors for document production.

• The petitioner challenged the CGST summons, arguing that the State GST had already initiated proceedings on the same issue (ITC claims from cancelled dealers), violating Section 6(2)(b).

B. Core Legal Questions

1. Whether summons under Section 70 = "initiation of proceedings" under Section 6(2)(b)?
   Court’s View: No.
   Summons (Section 70) are part of an inquiry/investigation to gather evidence.
   "Proceedings" (Section 6(2)(b)) commence only with a show-cause notice (e.g., under Sections 73/74) for adjudication of tax liability.
   Rationale: Issuing summons does not finalize the subject matter or liability; it is a preliminary step (G.K. Trading v. Union of India, 2020 SCC OnLine All 1907).

2. What constitutes "same subject matter"?
   Test laid down:
   Identical tax liability/offense based on the same facts.
   Identical relief/demand (e.g., recovery of specific ITC).
   Example: If State GST issues a show-cause notice for ITC fraud (2019-2020), CGST cannot initiate proceedings for the same fraud period.

C. Key Principles from the Judgment

• "Single Interface" vs. "Cross-Empowerment":
  Taxpayers are assigned to either Central or State GST for routine matters (e.g., audits, returns).
  Both authorities can initiate intelligence-based enforcement (e.g., searches) irrespective of administrative assignment (Circular 05.10.2018).

• Section 6(2)(b) Bar Applies Only When:
  A show-cause notice has been issued by one authority.
  The subject matter (specific liability/offense) is identical.

• Summons ≠ Proceedings:
  Summons are investigative tools; proceedings begin with a show-cause notice triggering adjudication.

D. Guidelines for Authorities & Taxpayers

1. For Taxpayers:
   Must comply with summons but can inform authorities if parallel inquiries exist.
   Can approach courts if authorities disregard overlap (Article 226, Constitution).

2. For Authorities:
   Must communicate and coordinate if overlapping inquiries arise.
   The first authority to initiate proceedings (via show-cause notice) retains jurisdiction.

3. Systemic Reforms Suggested:
   GSTN portal must reflect real-time actions to avoid duplication.
   Data sharing between Central/State authorities to uphold "cooperative federalism."

E. Final Conclusion

• Summons (Section 70) do not trigger the bar under Section 6(2)(b).

• Section 6(2)(b) is violated only if show-cause notices are issued by both authorities on the same subject matter.

• The Delhi High Court’s dismissal of the writ petition was upheld.