GST Jurisdiction Wars: Can State Authorities Adjudicate Centrally Administered GSTINs?

1. Why jurisdiction tussles are erupting under GST

GST was introduced with the promise of a unified levy – “one nation, one tax”. On the ground, however, many assessees are experiencing something very different: one nation, two parallel administrative hierarchies, and in some situations, multiple proceedings for the very same period and issues.

In Karnataka, this problem is becoming stark. Several assessees whose registrations reflect Central administration on the GST portal are now:

  • Facing inspections from the State Enforcement wing,
  • Being issued DRC‑01A and DRC‑01 by State officers, and
  • Receiving adjudication orders from State Audit authorities,

all for periods where the GSTIN is clearly tagged as under Central jurisdiction.

Compounding this, Central officers often step in later with their own audit notices, sometimes responding to an assessee’s reliance on Section 6(2)(b) by threatening to “hand over to DGGI”, rather than addressing the jurisdiction objection.

This administrative overlap runs counter to the explicit bar in Section 6(2)(b) of the CGST Act 2017, which mandates that once proceedings have been initiated by one side (Central or State) on a particular subject‑matter, the other side must not initiate fresh proceedings on the same subject‑matter for the same period.

Multiple High Courts have read this provision as a clear prohibition on dual or parallel proceedings. Yet, in field practice, jurisdiction is frequently treated as a mere procedural formality.

The Karnataka‑based case of a scrap dealer outlined below illustrates how State officers are effectively taking over adjudication against a centrally administered GSTIN, and offers a platform to revisit what the law actually contemplates.

2. Illustrative case: State adjudication running against a Central GSTIN

2.1 Brief facts

Consider an assessee whose GST registration is explicitly shown as under Central jurisdiction on the GST portal.

Despite that:

  • A State CCT/JDN order dated 31.07.2023 and an internal assignment by JCCT (Enforcement – State) triggered State action.
  • Acting on this, ACCT (Enforcement – State):
    • Conducted an inspection under Section 67, and
    • Issued DRC‑01A and DRC‑01 covering F.Y. 2022‑23 to 2025‑26.
  • The Enforcement officer then:
    • Prepared a report and
    • Forwarded his findings along with the DRC‑01 summary to DCCT (Audit‑1 – State).
  • Relying primarily on that report, DCCT (Audit‑1 – State):
    • Passed adjudication orders for F.Y. 2024‑25 and F.Y. 2025‑26, even though the assessee’s GSTIN is centrally administered.
  • For F.Y. 2023‑24, DRC‑01 has been served by State Enforcement, and final order is awaiting issuance by State Audit.

The net result is that the State machinery has undertaken full‑fledged adjudication for four financial years in relation to an assessee whose primary jurisdiction lies with the Centre.

The central question is straightforward:

Can State GST officers, without a clear and valid cross‑empowerment notification and specific administrative assignment, undertake independent adjudication under Sections 73/74/74A against a GSTIN which is assigned to the Centre?

On a proper reading of Section 6 and in light of consistent High Court jurisprudence, the answer is negative unless:

  • There exists a proper notification under the GST law cross‑empowering the particular State officer as the “proper officer” for that specific function, and
  • There is a clear administrative allocation that assigns that assessee (and the particular subject‑matter) to such officer.

Absent these elements, State authorities may certainly assist – for instance, in intelligence gathering, inspection, and search under Section 67 – but they cannot run an independent adjudication process on a centrally administered GSTIN.

3. Jurisdiction design under GST – how it is supposed to operate

3.1 Dual structure: CGST and SGST

India follows a dual GST model. For intra‑State supplies, the levy is split into:

  • Central Goods and Services Tax (CGST), and
  • State Goods and Services Tax (SGST).

Accordingly, we have:

  • Central officers under CGST Commissionerates, and
  • State officers under State GST/Commercial Taxes Departments.

Section 6 of the CGST Act forms the backbone of the cross‑empowerment framework.

  • Under Section 6(1), officers of Central tax and State tax can act as “proper officers” for each other’s laws, but strictly in accordance with notifications and subject to the stipulated conditions.
  • Section 6(2)(b) provides a crucial safeguard by stating:

“Where a proper officer under the CGST Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under the SGST Act on the same subject matter and vice versa.”

This clause encapsulates the “one issue, one authority” rule in statutory form.

3.2 Administrative allocation: Centre vs State

Through GST Council decisions and departmental instructions, assessees are split between Centre and State (e.g., 90:10 distribution, based on turnover brackets, etc.).

On the GST portal, each GSTIN is tagged to either:

  • Central administration, or
  • State administration.

The authority shown as primary jurisdiction is generally responsible for:

  • Routine assessments and verification,
  • Scrutiny of returns,
  • Audit under Sections 65/66, and
  • Adjudication under Sections 73, 74, 74A.

The “other” side, while cross‑empowered for many functions, is expected to:

  • Share intelligence,
  • Provide assistance in inspection/search/seizure under Section 67, and
  • Coordinate on enforcement without initiating separate adjudications on the same tax demand for the same period.

When both authorities raise independent demands on the same issue and period, it undermines the legal architecture of Section 6(2)(b) and raises serious questions of jurisdictional overreach and double jeopardy in practice.

4. Judicial approach: How courts are reading Section 6(2)(b)

4.1 Orissa & Calcutta High Courts – strong stand against dual proceedings

The Orissa High Court has set aside a CGST demand in a case where SGST authorities had already: