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27. The High Court of Kerala in K.T. Saidalavi v. State Tax Officer, reported in 2024 SCC OnLine Ker 5674, dealt with a case where the Central GST authority had initiated an enquiry concerning non- payment of GST, directing the production of certain records, followed by the issuance of summons under Section 70 of the CGST Act. During the pendency of this enquiry, the State GST authority initiated proceedings under Section 74 of the respective State GST enactment. The Court held that the initiation of an enquiry or issuance of summons under Section 70 cannot be equated with the initiation of proceedings for the purposes of Section 6(2)(b) of the CGST Act. The term “initiation of any proceedings” is in reference to the issuance of a notice. It further observed that the Circular dated 05.10.2018 did not appear to be in consonance with the mandate of Section 6(2)(b) of the Act. The relevant observations read as under:

28. The High Court of Rajasthan in Rais Khan v. Add. Commissioner, Enforcement Wing-II, D.B. Civil Writ Petition No. 3087/2024, dealt with a challenge to the issuance of summons by the DGGI, on the ground that the proceedings had already been initiated by the State GST authority. The Court observed that the terms “proceedings” under Section 6(2)(b) of the CGST Act and “inquiry” under Section 70 cannot be conflated to imply a bar on the issuance of summons. It held that the mere issuance of summons does not amount to the initiation of proceedings under Section 6(2)(b). The relevant observations read as under:

59. We affirm and appreciate the view taken by the High Court of Allahabad in G.K. Trading (supra) and the High Court of Kerala in K.T. Saidalavi (supra) respectively. The High Court of Allahabad rightly held that the issuance of summons cannot be conflated with a statutory step taken upon conclusion of an inquiry. Similarly, the High Court of Kerala was correct in holding that initiation of inquiry or the issuance of summons does not amount to the initiation of “any proceedings”. The phrase “initiation of any proceedings” refers specifically to the issuance of a notice under the relevant provisions of the GST enactment.

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.