The Supreme Court in Armour Security (India) Ltd. v. Commissioner, CGST addressed a significant question under the Central Goods and Services Tax (CGST) Act, 2017. When exactly do “proceedings” under Section 6(2)(b) commence? Armour Security, a service provider, challenged overlapping actions taken by both State and Central GST authorities, arguing that once one authority had initiated proceedings, the other was barred from parallel action.
The core issue was whether preliminary measures such as search, seizure, or issuance of summons amounted to “initiation of proceedings” under Section 6(2)(b). The taxpayer contended that these steps themselves constituted proceedings, thereby preventing any subsequent action by another authority. The department argued that these were merely investigative steps, and formal proceedings began only with a show-cause notice (SCN).
The Supreme Court sided with the department, holding that search, seizure, inspection, or summons are only part of an inquiry or investigation and do not qualify as initiation of proceedings under Sections 73 or 74 of the CGST Act. It clarified that proceedings formally commence only when an SCN is issued, and once issued by one authority, another authority cannot adjudicate the same matter ensuring the principle of “one taxpayer, one adjudicating authority.”
This judgment is a landmark because it harmonises the cross empowerment scheme under GST, removes uncertainty about jurisdictional overlaps, and provides much-needed clarity to businesses facing multiple notices.