The Delhi High Court has declined to quash a GST demand of ₹10.57 crore against a media services company, holding that an earlier proceeding by the Directorate General of GST Intelligence (DGGI) did not bar a separate proceeding concerning a different tax issue. 

The Bench of Justice Anil Kshetarpal and Justice Rajneesh Kumar Gupta has observed that the company had missed its statutory appeal period and had offered no satisfactory explanation for waiting nearly two years to file a writ petition.

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The petitioner/assessee provides script services to Zee Entertainment Enterprises Limited and is registered with the Delhi GST authorities. In March 2023, the DGGI issued a common show cause notice to 45 noticees, including assessee and its former director. That proceeding, initiated under Section 74 of the CGST Act and corresponding provisions, concerned allegations of fraudulent availment of input tax credit (ITC) without actual supply of goods or services.

The Delhi Sales Tax Officer subsequently issued assessee a notice under Section 73 for the period April 2019 to March 2020. The resulting order found that the company had not declared its correct tax liability and had claimed ITC from taxpayers who had not paid the corresponding tax on their outward supplies. The officer denied ITC with reference to Section 16(2)(c) and created a total liability of ₹10,57,75,250.

Vertilink argued that Section 6(2)(b) of the CGST Act prohibited the Delhi officer from proceeding because the DGGI had already taken up the same transactions. It also pointed to the later conclusion of the DGGI proceeding: Zee Entertainment, the principal noticee, had paid the disputed ITC amount along with interest and a penalty of 25% of the tax, following which proceedings against the remaining noticees were treated as concluded.

What counts as the “same subject matter”?

The Court said Section 6(2)(b) seeks to prevent parallel proceedings by different GST authorities on the same subject matter. But proceedings do not become identical simply because they involve the same taxpayer, an overlapping period, common transactions, or the broad subject of ITC.

The Bench distinguished the notices by their allegations and the liabilities they sought to determine. The Delhi officer’s Section 73 proceeding addressed Vertilink’s declared tax liability and the admissibility of ITC under Section 16(2)(c). The DGGI’s Section 74 proceeding involved 45 noticees and allegations of fraudulent ITC claims without actual supply. On the material before it, the Court found that assessee had not established the identity of subject matter required to invoke Section 6(2)(b).

The transfer of an earlier investigation to the DGGI did not, the Court added, remove another proper officer’s jurisdiction over a different subject matter.

The Court rejected Vertilink’s argument that the conclusion of the DGGI proceeding automatically ended its liability under the Delhi officer’s order. No tax, interest or penalty had been directed to be recovered from assessee in the DGGI proceeding. Its conclusion following payment by the principal noticee could not retrospectively invalidate a separate proceeding founded on a different statutory basis.

Vertilink also invoked Section 75(13), which it argued prevented a further penalty for the same act or omission. The Bench found no earlier penalty imposed on assessee in the DGGI proceeding and held that merely being named as a co-noticee was insufficient to establish that bar.

The August 2024 demand order was open to a statutory appeal, but assessee did not file one within the prescribed period. It instead filed a rectification application on April 7, 2025, and approached the High Court in August 2026.

The Bench held that a pending rectification application did not extend the time to challenge the original order or adequately explain the delay. It found no basis to bypass the statutory appellate process through its discretionary writ jurisdiction.

The Court dismissed the writ petition while leaving assessee free to pursue, in accordance with law, any remedy available against an order on its pending rectification application. It clarified that its observations should not be treated as a final decision on issues that may properly arise before a competent statutory authority.

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