ARMOUR SECURITY VS. UNION OF INDIA: CONTRACTUAL BREACH DOES NOT BAR LEGAL REMEDY UNDER ARTICLE 226

ARMOUR SECURITY VS UNION OF INDIA: CONTRACTUAL BREACH DOES NOT BAR LEGAL REMEDY UNDER ARTICLE 226

IN THE SUPREME COURT OF INDIA

M/s ARMOUR SECURITY (INDIA) LTD
V/s
COMMISSIONER, CGST, DELHI
EAST COMMISSIONERATE & ANR.

Civil Appellate Jurisdiction
Special Leave Petition (C) No. 6092 of 2025
Date of Judgment/Order: 14th August 2025

HEADNOTE-

This petition arises from the impugned judgment and order passed by the High Court of Delhi by which the High Court dismissed the writ petition filed by the petitioner herein, and declined from interdicting the summons issued to the petitioner under Section 70 of the Central Goods and Services Tax Act, 2017 by the Commissioner, Central Good and Services Tax, Delhi East Commissionerate (respondent no. 1). HELD-Petition is disposed of. 

IMPORTANT PARAGRAPHS-

61. In the present case, the petitioner was served with a show cause notice dated 18.11.2024 by the respondent no. 2 under Section 73 of the CGST Act, thereby initiating proceedings. The petitioner has impugned the summons dated 16.01.2025 and 23.01.2025 respectively issued by the respondent no. 1 for production of documents. At the summons stage, it cannot be predicated with certainty that the subject matter of the proceedings will be identical; the mere presence of an overlapping aspect under investigation does not ipso facto render the subject matter “same”. 

62. The High Court correctly held that the term “any proceedings” does not encompass summons issued pursuant to a search or investigation, as at the stage of issuance of summons the Department is merely engaged in gathering information. We are in agreement with the finding that a case of search is clearly distinct and separate from proceedings initiated only after issuance of a show cause notice.  

74. In the facts of the present case, the mere issuance of summons does not imply that the Department has decided to proceed against the taxpayer for recovery of liability. Therefore, issuance of summons, by no stretch, can be considered as the initiation of proceedings, since at that stage, the Department still retains the discretion not to initiate any proceedings. A mere contemplation or possibility of initiating action cannot be equated with “proceedings”, as doing so would undermine the framework of cross-empowerment under the Act. Even when a discovery is made during the search proceedings under Section 67 of the CGST Act, the Department is required to bring such proceedings to a definitive conclusion, either by issuing a show cause notice under Section 74 or by dropping the matter altogether.

ORDER

Para No. 99. The DGGI may consider adopting necessary measures to develop a robust mechanism for seamless data and intelligence sharing between the Central and State authorities, including provision for real-time visibility to both authorities of any action taken pursuant to an intelligence input, thereby advancing the objectives of harmony and cooperative federalism.