**Parallel GST Proceedings: Delhi High Court Clarifies the “Same Subject Matter” Test**
Two GST Proceedings, One Taxpayer: When Does Section 6(2)(b) Apply?
Case: M/s Vertilink Media Solutions Private Limited v. Anti Evasion Branch & Ors.Court: Delhi High Court | Judgment: 25 September 2026 | Case No.: W.P.(C) 13077/2026
Can a State GST authority proceed against a taxpayer when DGGI has already issued a show cause notice involving that taxpayer? The Delhi High Court’s answer turns on a precise question: are both proceedings about the same subject matter?
Vertilink challenged a demand of approximately ₹10.58 crore raised under Section 73 of the CGST Act. It argued that an earlier DGGI show cause notice under Section 74, involving allegations of fraudulent input tax credit, prevented a second authority from proceeding. The company relied on Section 6(2)(b), which restricts parallel proceedings by Central and State tax authorities on the same subject matter.
The Court examined the scope of the two notices. The DGGI proceedings concerned alleged fraudulent availment of ITC without actual supply and involved 45 noticees. The challenged Section 73 proceedings addressed Vertilink’s declared tax liability and ITC eligibility under Section 16(2)(c). An overlapping financial period or common transactions, the Court held, did not by itself establish that the subject matter was identical.
The Court also noted that Vertilink had not used its statutory appeal against the 2024 demand order and had approached the writ court after substantial delay. It dismissed the petition. The conclusion of the DGGI proceedings following payment by a principal noticee did not automatically extinguish the separately determined demand against Vertilink.
What this means in practice: A taxpayer raising a Section 6(2)(b) objection must compare the notices closely: the transactions, allegations, legal basis and liability proposed. For the department, the decision underscores the value of clearly defining the scope of each proceeding. The Court did not decide the underlying tax demand on its merits.
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