No Central Proceedings Initiated When State Issued Assessment Order: Patna HC Finds No Procedural Error

The Patna High Court validated Bihar GST authorities' jurisdiction in a ₹28 crore assessment case, rejecting the taxpayer's challenge against parallel proceedings by Central authorities. Justice Rajeev Ranjan Prasad ruled that once a state issues assessment orders, the Centre cannot initiate overlapping proceedings under Section 6(2)(b) of IGST Act. The judgment clarifies the "one authority" principle in GST audits, preventing dual harassment. The court analyzed the transaction chain to confirm the state's territorial jurisdiction over the dealer's steel supply operations. This precedent strengthens the GST Council's cross-empowerment framework, where assessments follow the taxpayer's principal place of business. The verdict mandates portal-based verification of existing proceedings before issuing new notices, reducing litigation on jurisdictional grounds. Revenue officials estimate this could resolve 12,000+ pending disputes on forum shopping allegations. However, the judgment permits central intervention in proven cases of collusion between taxpayers and state authorities, with the burden of proof on investigating officers. Practitioners advise businesses to maintain clear documentation of all state proceedings to preempt central notices.