The Supreme Court’s decision in Armour Security (India) Ltd. vs. Commissioner, CGST, Delhi is a landmark ruling under GST law, especially for companies and directors frequently facing summons and parallel actions by Central and State GST authorities.

This judgment finally settles a long-standing controversy:

Armour Security (India) Ltd. vs. Commissioner, CGST, Delhi East Commissionerate

[2025] 177 taxmann.com 478 (SC) | Neutral citation: 2025 INSC 982 | Judgment dated 14 Aug 2025

Does issuance of summons or investigation by one GST authority bar another authority from acting on the same issue?

The answer given by the Supreme Court is clear, practical, and balanced—protecting taxpayers from duplication while preserving enforcement powers

Brief Legislative Background (Why this dispute arises)

GST’s “Single Interface” idea

GST was designed so that a taxpayer should not face duplicate action from two wings (Centre + State) for the same dispute. For this, Parliament provided a cross-empowerment + anti-duplication safeguard in Section 6.

The safeguard

If one authority has initiated proceedings on the same subject matter, the other should not initiate parallel proceedings (Section 6(2)(b)).
The problem: taxpayers started arguing that summons/inquiry by one authority itself blocks the other authority.

The Supreme Court in Armour Security resolves this.

Facts of the Case

Company received a Show Cause Notice (SCN) for FY 2020-21 under Section 73 from one GST authority.
Later, Central GST officers conducted search under Section 67(2) and issued summons to Directors under Section 70.
The company argued: since State side already issued SCN / proceedings started, Central summons should be barred under Section 6(2)(b).
Delhi High Court refused to interfere; matter reached SC.

Statutory Provisions Interpreted (core sections)

(A) Section 6, CGST Act — Cross-empowerment + bar on duplication

Key part: Section 6(2)(b) prevents initiation of proceedings by CGST officer where SGST officer has initiated proceedings on the “same subject matter”.

(B) Section 70 — Power to summon

Summons are part of inquiry / evidence gathering (not an adjudication by itself). The SC clarifies its status vis-à-vis Section 6(2)(b).

(C) Section 73 — Demand for non-fraud cases

Shows the matter is in adjudication track via SCN.

(D) Search/Seizure (Section 67) — Investigation powers

Search/seizure also do not automatically mean “proceedings initiated” for Section 6(2)(b).

Core Questions before Supreme Court

The SC framed and answered (in substance):

Is issuance of summons “initiation of proceedings” for Section 6(2)(b)?
What is “subject matter” under Section 6(2)(b)?
What counts as an “order” under Section 6(2)(a)?

Detailed Analysis of the Judgment (what SC held)

A) Summons ≠ Initiation of Proceedings

Supreme Court clearly held:

“Proceedings” under Section 6(2)(b) refers to formal adjudicatory start i.e., issuance of SCN.
Summons, search, seizure etc. are information-gathering steps and do not amount to “proceedings”.

This is extremely important because many writs were being filed only against summons.

B) “Subject Matter” is tied to the SCN (not to summons)

SC held:

You cannot reliably know “subject matter” merely from summons.
“Subject matter” crystallizes from the SCN because SCN contains charges/grounds/quantification.

Twofold test laid down by SC (big takeaway)

A subject matter is “same” when:

authority has proceeded on identical liability/offence on same facts, AND
demand/relief sought is identical.

C) Audit/Scrutiny vs Intelligence-based enforcement (who should act?)

SC drew an important operational distinction:

Audit/detailed scrutiny of returns should be initiated by the administration to which taxpayer is assigned.
Intelligence-based enforcement can be initiated by either Central or State even if taxpayer is assigned to the other.
Once one administration initiates intelligence enforcement, parallel proceedings should not be initiated by the other administration.

Comparative Analysis with Earlier Judgments (before Armour Security)

Before this SC judgment, High Courts had conflicting views on whether summons = proceedings. The SC notes these contrary lines and settles it.

What changes after SC ruling?

Earlier: taxpayers relied on some HC decisions to argue that “any action” blocks other authority.
Now: summons alone is not enough; bar triggers at SCN stage, and only if “same subject matter” test is satisfied.

Core Principles Emanating from the Judgment

Section 6(2)(b) bars parallel “proceedings” only on the same subject matter.
Summons/search/seizure are not “proceedings”.
Proceedings commence with SCN (formal adjudication).
“Subject matter” = liability/contravention/demand as framed in SCN.
Twofold test to check “same subject matter”.
Any SCN issued over liability already covered by an existing SCN should be quashed.

Practical Implications for Directors and Companies (very important section)

A) When Directors receive Summons (Section 70)

Do not ignore. SC says the assessee must first comply—appear and furnish response—because summons alone doesn’t establish “same subject matter”.

Director-level action checklist

Attend / authorize appearance.
Provide documents carefully (keep copies).
Record what was asked and submitted.
Ask for written acknowledgement wherever possible.

B) What if two authorities contact you on same issue?

SC gives a practical protocol:

If you learn another authority is already inquiring on same issue, inform the later authority in writing immediately.
Authorities must coordinate and verify overlap.
If overlap is not found, department must communicate reasons and specify distinct subject matters in writing.
If both can’t decide who will proceed, the authority that first initiated inquiry will continue; courts can transfer.

C) Litigation strategy (when writ is appropriate)

If authorities don’t follow SC guidelines, taxpayer can approach High Court under Article 226.

“Way Forward” (policy + compliance angle)

The SC itself suggested systemic improvement:

Need robust data/intelligence sharing and real-time visibility between Central & State authorities to avoid duplication and hardship.

What companies should do going forward

Maintain strong GST documentation trail (GSTR-1/3B/2B reconciliation, e-way bill linkage).
Build an internal “Summons Response SOP”.
Map all ongoing notices/inquiries in a central litigation tracker.
If parallel inquiry starts, trigger the SC protocol immediately (written intimation + request for inter-department coordination).

Conclusion

The Supreme Court in Armour Security (India) Ltd. has struck a fine balance between taxpayer protection and revenue enforcement.

It ensures:

No harassment through parallel adjudication
No escape from investigation under the guise of Section 6

Frequently Asked Questions (FAQ)

1. Does issuance of GST summons amount to initiation of proceedings?

No. The Supreme Court in Armour Security (India) Ltd. vs. Commissioner, CGST held that issuance of summons under Section 70 of the CGST Act is only an investigative step and does not amount to initiation of proceedings. Proceedings commence only when a Show Cause Notice (SCN) is issued.

2. When do GST proceedings actually begin under the CGST Act?

GST proceedings begin only with the issuance of a Show Cause Notice under Sections 73 or 74 of the CGST Act. Actions like summons, search, or seizure are part of inquiry and do not trigger adjudication.

3. What is meant by “same subject matter” under Section 6(2)(b) of the CGST Act?

“Same subject matter” refers to identity of facts, period, alleged contravention, and tax liability. The Supreme Court held that proceedings are barred only if both authorities are acting on the same issue and same demand for the same period.

4. Can both Central GST and State GST authorities issue summons on the same issue?

Yes. The Supreme Court clarified that summons can be issued by either authority, as summons are not proceedings. However, parallel Show Cause Notices on the same subject matter are not permitted.

5. Can GST summons to directors be challenged in writ jurisdiction?

Generally, no. The Supreme Court held that summons should not be challenged prematurely. Directors must first comply and cooperate. Judicial intervention is justified only if summons are patently illegal, abusive, or without jurisdiction.

6. Does Section 6(2)(b) of CGST Act bar all parallel GST actions?

No. Section 6(2)(b) bars only parallel adjudication proceedings on the same subject matter. It does not bar investigation, inquiry, summons, or intelligence-based enforcement actions.

7. What is the difference between GST investigation and adjudication?

Investigation includes summons, search, seizure, and inquiry to collect evidence.
Adjudication starts with issuance of a Show Cause Notice and culminates in an order determining tax liability.

Only adjudication attracts the bar under Section 6(2)(b).

8. Who should conduct GST audit or scrutiny of returns?

Audit and detailed scrutiny of returns should be conducted by the GST authority to which the taxpayer is administratively assigned. However, intelligence-based investigations can be initiated by either Central or State GST authorities.

9. What should a taxpayer do if two GST authorities act on the same issue?

The taxpayer should:

Inform the later authority in writing about existing proceedings
Request inter-departmental coordination
Seek judicial remedy only if authorities fail to resolve overlap

10. How does the Armour Security judgment help companies and directors?

The judgment:

Prevents harassment through parallel adjudication
Clarifies compliance obligations for summons
Protects against duplicate tax demands
Brings certainty to GST litigation strategy

11. Does this judgment weaken GST enforcement powers?

No. The Supreme Court struck a balance. It preserves investigation powers while ensuring taxpayers are not subjected to duplicate adjudication for the same issue.

12. Is this judgment binding on all GST authorities?

Yes. As a Supreme Court judgment, it is binding on all Central and State GST authorities across India under Article 141 of the Constitution.